Crypto Treasury Trend Cracks as Firms Borrow to Buy Back Shares

According to Cryptonews, the crypto treasury trend that swept through small-cap firms in 2024 is beginning to crack. At least seven companies, including a golf cart maker and biotech firms, are now launching share buybacks funded by debt to prop up falling stock prices. In some cases, market values have dropped below the worth of the crypto assets they hold, signaling investor skepticism about the long-term viability of the strategy. Strive Asset Management recently acquired Semler Scientific, a bitcoin-heavy firm, highlighting how these companies are becoming takeover targets. ETHZilla, formerly 180 Life Sciences, secured $80 million in debt to fund a $250 million share buyback after its stock dropped 76% from its August peak. Analysts warn that borrowing to buy shares contradicts the core idea of the crypto treasury model, which relies on digital asset appreciation to lift stock value. K33 Research reports that 25% of public companies holding Bitcoin now trade at market values below their BTC holdings, reflecting a sharp drop in investor confidence.