A remarkable event shook the Nasdaq trading floor on May 27. SharpLink Gaming (SBET), a relatively unknown small-cap betting company with a market value of just $10 million, announced it had acquired approximately 163,000 Ethereum (ETH) through a $425 million private equity investment.
The news sent SharpLink’s stock soaring, with gains exceeding 500% at one point.
This incident is not isolated. An increasing number of publicly listed companies in the U.S. are turning to cryptocurrency acquisitions as a method to stimulate their stock prices and enhance market valuation.
From tech firms to retail giants and even small gambling enterprises, companies are leveraging crypto assets to fuel new growth narratives and attract investor attention.
How It All Started: The MicroStrategy Playbook
The trend traces back to MicroStrategy (now rebranded as Strategy, stock ticker MSTR), the company that ignited this movement back in 2020 with its bold bets on Bitcoin.
Within five years, MicroStrategy transformed from an ordinary business software provider into a "pioneer in Bitcoin investment." Its stock, which traded at just over $10 in 2020, surged to $370 by 2025, pushing its market capitalization past the $100 billion mark.
Buying cryptocurrency did more than just inflate MicroStrategy’s balance sheet—it turned the company into a darling of the capital markets.
The Strategy: Convertible Bonds and Bitcoin
MicroStrategy’s approach can be summarized in a repeatable model: combining low-cost convertible debt with strategic Bitcoin accumulation.
First, the company raised capital by issuing convertible bonds with extremely low interest rates—sometimes as low as 0%. For example, in November 2024, it issued $2.6 billion in convertible notes, achieving nearly zero-cost financing.
These bonds allow investors to convert their debt into company stock at a predetermined price in the future. This structure effectively provides investors with a built-in call option while granting MicroStrategy access to cheap capital.
Second, the company deployed all raised funds into buying Bitcoin. Through multiple rounds of financing, it continued accumulating BTC, making cryptocurrency the core asset on its balance sheet.
Finally, MicroStrategy leveraged the rising price of Bitcoin to create a self-reinforcing "flywheel effect."
As Bitcoin’s price climbed from around $10,000 in 2020 to over $100,000 in 2025, the value of the company’s assets ballooned. This attracted more investors to its stock, driving share prices higher. The elevated stock price, in turn, enabled MicroStrategy to issue additional bonds or equity at better terms, raising even more capital to buy more Bitcoin.
This cycle of low-cost funding and high-return asset accumulation became a textbook case of financial engineering in the crypto age.
SharpLink Gaming: A New Variation on the Theme
SharpLink Gaming (SBET) adopted a similar strategy but with a twist—it used Ethereum instead of Bitcoin.
More importantly, its story illustrates how crypto-native players are partnering with public companies to accelerate market entry.
The "Shell Company" Strategy
SharpLink was originally a small company struggling to maintain its Nasdaq listing. Its stock had fallen below $1, shareholder equity was under $2.5 million, and it faced serious compliance risks.
But it had one invaluable asset: a Nasdaq-listed shell.
This shell attracted attention from major players in the crypto industry— notably ConsenSys, led by Ethereum co-founder Joe Lubin.
In May 2025, ConsenSys partnered with crypto-focused venture firms like ParaFi Capital and Pantera Capital to execute a $425 million PIPE (Private Investment in Public Equity) deal, effectively taking control of SharpLink.
They issued 69.1 million new shares at $6.15 per share, securing over 90% ownership of the company. Joe Lubin was appointed chairman of the board, and ConsenSys announced plans to collaborate with SharpLink on developing an "Ethereum treasury strategy."
The Three-Step Capital Cycle
SharpLink’s approach can be broken down into three repeating steps:
- Low-cost capital raising: Through the PIPE transaction, SharpLink raised $425 million without the complexity of an IPO or SPAC merger.
- Narrative-driven price surge: The "Ethereum version of MicroStrategy" story sparked investor enthusiasm, driving the stock price up far beyond the value of its underlying assets.
- Re-financing and expansion: At a higher stock price, SharpLink could theoretically raise more capital, buy more ETH, and repeat the cycle—creating a snowball effect in valuation.
It’s worth noting that SharpLink also planned to stake its ETH holdings, earning an estimated 3%–5% in annual yield—adding another layer to its investment thesis.
However, critics pointed out that SharpLink’s core business—gaming and betting marketing—was largely irrelevant to this new strategy. The $425 million ETH acquisition plan seemed completely disconnected from the company’s operational fundamentals.
Its soaring stock price was largely driven by speculative interest and crypto narrative appeal—not business performance.
Imitation Isn’t Always Flattering
While MicroStrategy and SharpLink showcased the potential of crypto acquisition strategies, not every company that followed suit met with success.
Case Study: GameStop’s Cool Reception
On May 28, GameStop—the meme stock famous for the 2021 retail trader short squeeze—announced it had purchased 4,710 Bitcoin worth approximately $512.6 million.
Unlike MicroStrategy’s market response, GameStop’s announcement was met with skepticism. Its stock price fell 10.9% after the news broke, suggesting investors weren’t convinced by the move.
Extreme Mismatches: Addentax and Jiuzi Holdings
Other companies attempted to replicate the strategy with even more questionable positioning.
Addentax Group Corp (ATXG), a Chinese textile and apparel company, announced plans to acquire 8,000 Bitcoin and Trump-themed $TRUMP tokens through a stock issuance. The Bitcoin purchase alone would exceed $800 million—yet the company’s total market capitalization was only around $4.5 million.
Similarly, Jiuzi Holdings (JZXN), a Chinese新能源汽车 retailer focused on lower-tier cities, revealed its intention to buy 1,000 Bitcoin (over $100 million) within a year. Its market cap at the time was approximately $50 million.
In both cases, the proposed cryptocurrency acquisitions were vastly disproportionate to the companies’ market valuations and core operations.
These examples highlight a critical risk: if Bitcoin’s price declines, companies that over-leverage or over-allocate to crypto could face severe balance sheet pressure.
What worked for MicroStrategy may not be a universal playbook. Without solid fundamentals or a clear strategic alignment, buying crypto can easily become a speculative gamble rather than a sound treasury strategy.
The Bigger Picture: Crypto Going Mainstream
Despite the risks, the trend of corporations buying cryptocurrency continues gaining momentum.
In 2025, persistent inflation concerns and U.S. dollar depreciation fears have led more businesses to consider Bitcoin and Ethereum as potential inflation-resistant assets.
Japanese company Metaplanet has already adopted a Bitcoin treasury strategy to enhance its market value, and more U.S. firms are following MicroStrategy’s lead at a rapid pace.
Two Paths to Mainstream Adoption
This corporate movement reflects a broader integration of crypto into the global economic system. There are two primary paths through which cryptocurrency is achieving mainstream recognition:
- The rise of stablecoins: Stablecoins like USDC and USDT provide a less volatile medium for payment, savings, and remittance within the crypto ecosystem. However, they also extend the reach of traditional financial systems—particularly the U.S. dollar—into digital asset markets.
- Crypto on corporate balance sheets: As seen with MicroStrategy and others, companies are using cryptocurrency as a treasury asset to attract investors, enhance valuation, and hedge against macroeconomic uncertainty.
These developments represent a form of "crossing over" that crypto enthusiasts have long anticipated—but the reality is more complex than pure ideological adoption.
In many cases, crypto assets are being used as tools within existing financial frameworks rather than as replacements for them.
Frequently Asked Questions
Why are companies buying cryptocurrency?
Companies acquire crypto for several reasons: to diversify treasury assets, hedge against inflation, attract investor interest, and generate narrative-driven stock price appreciation. Some also believe in the long-term value of digital assets like Bitcoin and Ethereum.
Is corporate crypto buying just a stock price manipulation tactic?
While it can positively influence stock prices, not all attempts succeed. Companies with weak fundamentals or excessive leverage risk investor skepticism. Strategy alignment and market timing play crucial roles in how these moves are perceived.
What is a convertible bond, and how does it help companies buy crypto?
Convertible bonds are debt instruments that can be converted into company stock. They often carry lower interest rates, allowing companies to raise cheap capital. Firms like MicroStrategy use this capital to purchase crypto, aiming for asset appreciation that exceeds financing costs.
Can any publicly traded company replicate MicroStrategy’s success?
Not necessarily. MicroStrategy benefited from early entry, consistent strategy, and favorable market conditions. Latecomers may face higher crypto prices, regulatory scrutiny, and investor fatigue toward the narrative.
What are the risks of companies buying large amounts of cryptocurrency?
Key risks include cryptocurrency price volatility, regulatory changes, liquidity challenges, and balance sheet instability. If crypto markets decline, companies may face severe financial strain or even insolvency.
How do investors benefit from companies that hold crypto?
Investors gain exposure to cryptocurrency without directly buying it. They also potentially benefit if the company’s stock rises due to crypto holdings. However, they also inherit the risks associated with both the company’s business and crypto market fluctuations.
Conclusion
The phenomenon of public companies buying cryptocurrency represents a fascinating convergence of traditional finance and digital asset innovation.
While it offers a potential blueprint for enhancing market valuation and hedging against macroeconomic uncertainty, it is not without significant risks.
Companies considering this path must carefully evaluate their financial stability, strategic alignment, and investor expectations. For every MicroStrategy, there may be several others that fail to replicate its success.
As the landscape evolves, one thing is clear: cryptocurrency is no longer confined to the fringe—it is becoming an integral part of corporate treasury strategy and global finance.
Whether this trend leads to sustainable innovation or speculative excess remains to be seen. What’s certain is that the conversation around crypto and corporate finance is just beginning.