Microcaps Jump on Crypto Bandwagon, Attempting to Mimic MicroStrategy’s Strategy
A rising trend among microcap and nanocap companies is to leverage cryptocurrency as a way to boost their balance sheets, often drawing inspiration from the success of enterprise software giant MicroStrategy (MSTR).
Classover Holdings (KIDZ), a small education tech firm, made headlines in early May when it announced plans to sell $400 million worth of shares in order to purchase Solana. The announcement caused its stock to skyrocket, surging from $1.15 to more than $7 within two days, before stabilizing at around $3.69.
However, Classover wasn’t alone in this crypto venture. More and more small companies are adopting similar strategies — announcing plans to buy digital assets like Bitcoin or Solana and adding crypto to their balance sheets, with hopes of creating headlines and boosting stock prices. This new wave of companies is not necessarily focused on using crypto for business purposes or payments but is rather adding it as an eye-catching asset to attract investor attention.
GD Culture Group (GDC), a company valued at roughly $30 million, recently announced it would raise up to $300 million in shares to purchase Bitcoin and TrumpCoin, a meme token themed around former U.S. President Donald Trump. The company labeled the initiative a “crypto asset treasury strategy,” and its stock jumped 13% after the announcement.
Similarly, Amber International Holdings (AMBR), with a market value just under $900 million, revealed plans to allocate $100 million into a crypto portfolio that includes Bitcoin, Ethereum, Solana, XRP, Binance Coin, and Sui.
All these companies are seeking to emulate the success of MicroStrategy, which made waves in August 2020 when it decided to pivot to using Bitcoin as its main treasury asset. Since then, MicroStrategy’s stock has soared by over 3,000%, primarily due to the surge in Bitcoin’s price. Retail investors often treat MicroStrategy’s stock as a proxy for Bitcoin exposure.
However, unlike MicroStrategy — which had an established business model and clear, consistent strategies with Michael Saylor championing Bitcoin — these microcap companies are jumping on the crypto bandwagon without proven business plans or follow-through. For instance, Worksport, a truck bed cover manufacturer, announced in 2024 that it would allocate cash reserves to Bitcoin and XRP. While its stock surged initially, it eventually returned to pre-announcement levels.
The strategy is simple: announce large crypto purchases or allocations to attract attention and then capitalize on a brief surge in investor interest. In many cases, these proposed purchases significantly exceed the company’s market cap. For example, Classover and GD Culture Group each planned multi-million-dollar investments despite being worth only a fraction of that.
The ultimate question remains whether these companies will follow through on their crypto plans and whether they will truly embrace cryptocurrency in the long term. For now, the tactic seems to be working short-term, as the market continues to reward companies that capitalize on the crypto trend.
On the other hand, some firms appear to be taking a more serious, long-term approach, similar to MicroStrategy. For example, Metaplanet, a Japanese investment firm, has been steadily increasing its Bitcoin holdings to 6,796 BTC since its Bitcoin Treasury Operations began in April 2024. Likewise, Semler Scientific, a U.S.-based medical device company, has also been consistently adding Bitcoin to its balance sheet and currently holds 3,634 BTC.
While the latest trend among microcap firms may be short-lived, it highlights the increasing influence of cryptocurrency in the corporate world and the strategies companies are willing to employ to catch the attention of retail investors. Only time will tell if these companies can maintain their crypto-driven momentum or if they will fade as quickly as they rose.
