Companies in the crypto treasury sector are beginning to experience increases in share prices due to stock buyback initiatives, which analysts suggest may indicate that these firms are striving for greater credibility.
The media firm Thumzup, associated with Trump Jr., which holds Bitcoin (BTC) and Dogecoin (DOGE), announced on Wednesday its plan to increase a share buyback from $1 million to $10 million. This decision caused its stock (TZUP) to rise by 7% during the session, followed by an additional 0.82% after hours, bringing it to a trading price of $4.91.
Meanwhile, DeFi Development Corp (DFDV), a Solana treasury company, increased its share repurchase from $1 million to $100 million, resulting in its stock registering gains exceeding 5%. It ultimately closed with a gain of over 2%, followed by an additional 1% after hours, trading at $15.50.
These gains follow a report from Coinbase’s head of research, David Duong, and researcher Colin Basco, who suggested on Sept. 10 that crypto-purchasing public companies are entering a “player vs player” phase, intensifying their competition for investor capital.
The Treasury Race: A Matter of Credibility
In conversation with Cointelegraph, Ryan McMillin, chief investment officer at Australian crypto investment firm Merkle Tree Capital, remarked that stock buybacks signal a shift in the crypto treasury race toward a “credibility race.”
“Simply stating ‘we hold Bitcoin’ is no longer sufficient. Investors demand professional capital allocation — buybacks, dividends, and transparent treasury strategies,” he stated.
“The merger of corporate finance mechanisms with the digital asset narrative is impactful. It implies these companies wish to be evaluated based not merely on Bitcoin exposure, but on shareholder returns.”
Confidence Reflected in Buybacks
However, not all crypto treasury firms that have initiated buyback plans have seen positive results. TON Strategy Company, formerly Verb Technology Company, made a similar announcement on Sept. 12, but its stock (TONX) fell by 7.5% in response.
McMillin pointed out that share buybacks serve as a “classic signal of confidence,” indicating that a company believes its stock is undervalued. This is particularly relevant for publicly listed crypto treasury companies, whose valuations can fluctuate significantly in relation to their Bitcoin holdings (mNAV).
“A buyback can diminish that disparity by reducing available shares and demonstrating fiscal discipline — traits that investors appreciate. Additionally, prices may shift as traders anticipate increased demand. Increasing Bitcoin acquisition heightens exposure to volatility,” he explained.
“Conversely, a buyback directly enhances shareholder value while preserving the crypto treasury narrative. It also attracts a broader investor demographic — some focus on Bitcoin, others on capital discipline. A well-timed buyback achieves a balance.”
The Dollar vs Bitcoin Dilemma
In the meantime, Kadan Stadelmann, chief technology officer of the blockchain platform Komodo, shared with Cointelegraph that using cash reserves to repurchase shares reduces their availability to the public, creating scarcity that puts upward pressure on prices.
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“Crypto treasury firms are competing to build the most appealing crypto treasury frameworks, but we are witnessing hyperbitcoinization, which signifies a form of de-dollarization—Bitcoin vs. the dollar,” he noted.
Longevity of Crypto Asset Treasuries
Bitbo is monitoring firms that have included Bitcoin in their balance sheets, currently holding over 1.4 million coins, which amounts to approximately 6.6% of the total supply.
Michael Saylor’s company, Strategy, leads with 638,985 Bitcoin and continues its regular purchasing strategy. Some analysts suggest the market for crypto-acquiring companies may be oversaturated and that not all will endure in the long term.
Stadelmann expressed confidence, asserting that the trend of “crypto asset treasuries” is unlikely to diminish soon, as an “increasing number of firms are set to allocate portions of their treasuries into Bitcoin and other cryptocurrencies, including Fortune 500 companies.”
“A key consideration for investors is determining which companies are most inclined to retain their Bitcoin in both prosperous and challenging market conditions, rather than liquidate during downturns or crises.”
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