Original Article Title: "Buying Coins, the New Wealth Code of US-listed Companies"

Original Source: DeepTech TechFlow

On May 27th, in the Nasdaq trading hall, an unknown small stock set off a huge wave. SharpLink Gaming (SBET), a small-scale gaming company with a market value of only $10 million, announced the purchase of approximately 163,000 Ethereum (ETH) through a $425 million private equity investment. As soon as the news came out, SharpLink's stock price skyrocketed, with an increase of over 500% at one point.

Buying coins may be becoming the new wealth code for US-listed companies to boost their stock prices. The origin of the story is naturally MicroStrategy, which was the first company to ignite the fire, boldly betting on Bitcoin as early as 2020. In five years, it transformed from a regular tech company into a "Bitcoin investment pioneer." In 2020, MicroStrategy's stock price was just over $10; by 2025, the stock had soared to $370, with a market cap exceeding $100 billion.

Buying coins not only inflated MicroStrategy's balance sheet but also made it a darling of the capital markets. By 2025, this trend had escalated. From tech companies to retail giants, and now to small gaming companies, US-listed companies are using cryptocurrency to ignite a new engine for valuation. What's the secret behind using buying coins to boost market capitalization?

MicroStrategy, the Playbook for Coin-Stock Integration

It all started with MicroStrategy. In 2020, this enterprise software company was the first to kick off the US stock buying coins craze. CEO Michael Saylor once said that Bitcoin is a "more reliable store of value than the US dollar." Recharging with faith is fascinating, but what really set this company apart was its play in the capital markets.

MicroStrategy's playbook can be summarized as a combination of "convertible bonds + Bitcoin":

First, the company raised funds by issuing low-interest convertible bonds. Starting in 2020, MicroStrategy issued such bonds multiple times, with interest rates as low as 0%, far below the market average. For example, in November 2024, it issued $2.6 billion in convertible bonds, with a financing cost close to zero. These bonds allow investors to convert them into company stock at a fixed price in the future, equivalent to giving investors a call option, while allowing the company to obtain cash at an extremely low cost.

Next, MicroStrategy will invest all raised funds in Bitcoin. Through multiple rounds of financing to continuously increase its Bitcoin holdings, MicroStrategy has made Bitcoin a core part of its balance sheet.

Lastly, MicroStrategy has leveraged the premium effect brought by the rise in Bitcoin's price to initiate a "flywheel effect."

As the price of Bitcoin surged from $10,000 in 2020 to $100,000 in 2025, the company's asset value significantly increased, attracting more investors to buy its stock. The rise in stock price enabled MicroStrategy to issue bonds or stocks at a higher valuation, raising more funds to continue purchasing Bitcoin, thus forming a self-reinforcing capital cycle.

The core of this model lies in the combination of low-cost financing and high-return assets. By borrowing at near-zero cost through convertible bonds, investing in the highly volatile but long-term bullish Bitcoin, and then leveraging the market's enthusiasm for cryptocurrency to amplify the valuation. This strategy not only transformed MicroStrategy's asset structure but also provided a textbook example for other US-listed companies.

SharpLink, More Than Just a Shell Merger

SharpLink Gaming (SBET) optimized the above strategy, using Ethereum (ETH) as the asset instead of Bitcoin. However, behind this is a clever combination of crypto power and the capital market.

Its strategy can also be summarized as "shell merger," focusing on leveraging a public company's "shell" and the crypto narrative to rapidly expand the valuation bubble. SharpLink was originally a struggling small company on the brink of delisting from Nasdaq, with a stock price once below $1, shareholder equity below $2.5 million, and significant compliance pressure.

But it had a trump card - Nasdaq listing status. This "shell" attracted the attention of crypto giants: ConsenSys led by Ethereum co-founder Joe Lubin.

In May 2025, ConsenSys, together with several crypto-focused venture capital firms (such as ParaFi Capital, Pantera Capital), led a $425 million PIPE (Private Investment in Public Equity) acquisition of SharpLink. They issued 69.1 million new shares (at $6.15 per share), quickly securing over 90% control of SharpLink, bypassing the cumbersome processes of IPOs or SPACs. Joe Lubin was appointed as the chairman of the board, and ConsenSys clearly stated that they would collaborate with SharpLink to explore an "Ethereum Treasury Strategy."

Some say this is the ETH version of MicroStrategy, but in reality, the gameplay is more subtle. The true purpose of this transaction is not to improve SharpLink's gambling business, but rather to serve as a gateway for the crypto community to enter the capital markets.

ConsenSys plans to use this $425 million to purchase approximately 163,000 ETH, package it as the "Ethereum version of MicroStrategy," and claim that ETH is a "digital reserve asset." The capital market thrives on "story premiums," and this narrative has not only attracted speculative funds but also provided institutional investors who cannot hold ETH directly with a "public ETH proxy."

Buying the coins is just the first step; SharpLink's real "magic" lies in the flywheel effect. Its operation can be broken down into a three-step cycle:

First step, low-cost fundraising.

SharpLink raised $425 million through a PIPE at a price of $6.15 per share. Compared to an IPO or SPAC, this method does not require a cumbersome roadshow and regulatory process, resulting in lower costs.

Second step, market enthusiasm driving up stock price.

Investors are ignited by the story of the "Ethereum version of MicroStrategy," causing the stock price to soar rapidly. The market's enthusiasm for SharpLink's stock far exceeds its asset value, with investors willing to pay well above the net asset value of its ETH holdings. This "psychological premium" rapidly inflates SharpLink's market value. SharpLink also plans to stake these ETH tokens, locking them in the Ethereum network and earning a 3%-5% annualized return.

Third step, cyclic refinancing. By issuing more shares at a higher price, SharpLink can theoretically raise more funds, buy more ETH, and repeat the cycle, with the valuation growing like a snowball rolling downhill.

Behind this "capital magic" lies the shadow of a bubble. SharpLink's core business—gambling marketing—is almost being ignored, and the $425 million ETH investment plan is completely detached from its fundamentals. Its stock price surge is more driven by speculative funds and the crypto narrative.

The truth is, crypto capital can also quickly inflate the valuation bubble of some small to mid-sized public companies through the "shell + coin purchase" model. The key is not the wine itself, and whether the listed company's business is related or not is actually not important.

Imitation is Not Always the Key

Buying Bitcoin may seem like the "wealth code" of U.S. listed companies, but it is not always a guaranteed success. The road of imitation is crowded with followers.

· On May 28, GameStop, the game retail giant that once made headlines due to the retail investor battle against Wall Street, announced a $512.6 million purchase of 4,710 bitcoins, attempting to replicate MicroStrategy's success. However, the market reaction was lukewarm: after the announcement, GameStop's stock price fell by 10.9%, showing that investors were not convinced.

· On May 15, Addentax Group Corp (stock symbol ATXG), a Chinese textile and apparel company, announced its plan to acquire 8,000 bitcoins and Trump-themed TRUMP coins through a stock issuance, with the current Bitcoin price alone totaling $108,000, resulting in a purchase cost exceeding $800 million.

However, for comparison, the total market value of the company's stock is only around $4.5 million, meaning the theoretical cost of purchasing Bitcoin is over 100 times the company's market value. Almost simultaneously, another U.S.-listed Chinese company, Jiuzi Holdings (stock symbol JZXN), also joined this buying spree. The company announced its plan to purchase over 1,000 bitcoins in the next year, with a cost exceeding $100 million.

Public information indicates that Jiuzi Holdings is a Chinese company focused on retailing new energy vehicles, established in 2019. The company's retail stores are mainly located in China's third and fourth-tier cities. However, the company's stock market value on Nasdaq is only around $50 million.

The stock prices have indeed risen, but the alignment of the company's market value with the cost of buying Bitcoin is crucial. For many latecomers, if the price of Bitcoin falls and they actually buy in, their balance sheet will face immense pressure. The "buy Bitcoin" strategy is not a universal wealth code. A speculative bet on buying Bitcoin without fundamental support and with excessive leverage may only lead to the adventure of a bubble burst.

Another Path to Success

Despite the heavy risks, the Bitcoin buying frenzy still has the potential to become a new norm. By 2025, global inflation pressures and expectations of U.S. dollar depreciation are ongoing, and more and more companies are starting to view Bitcoin and Ethereum as "inflation-resistant assets." Japan's Metaplanet company has increased its market value through a Bitcoin treasury strategy, and more U.S. listed companies are quickly following in MicroStrategy's footsteps.

Under the overall trend, cryptocurrency is increasingly making its mark in global politics and the economy. Is this what people in the crypto community often refer to as "mainstreaming"? Taking a comprehensive look at the current trend, there are mainly two paths for cryptocurrency to go mainstream: the rise of stablecoins and cryptocurrency reserves on company balance sheets.

On the surface, stablecoins provide a stable medium of exchange for the crypto market, facilitating payments, savings, and remittances, reducing volatility, and driving widespread cryptocurrency adoption. However, in essence, stablecoins are an extension of the U.S. dollar hegemony. For example, taking USDC as an example, its issuer Circle has close ties to the U.S. government, holding a large amount of U.S. Treasury bonds as reserve assets. This not only strengthens the global reserve currency status of the U.S. dollar but also, through the circulation of stablecoins, further penetrates the influence of the U.S. financial system into the global crypto market.

The other path to mainstreaming is through the aforementioned trend of public companies adding cryptocurrency to their balance sheets. These companies attract speculative funds through the crypto narrative, boosting their stock prices. However, except for a few leading companies, it remains a mystery how much the fundamental business of these imitators can truly improve beyond achieving a high market valuation.

Whether it is stablecoins or the inclusion of cryptocurrency assets on public company balance sheets, cryptocurrency assets seem more like a tool used to perpetuate or strengthen the previous financial framework. Whether it's a pump and dump scheme or financial innovation, it's more like looking at both sides of a coin, depending on which side of the table you are sitting on.

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