Corporate Bitcoin Buying Spree: Booming Strategy Or Ticking Financial Time Bomb?

by Murtuza J Merchant Benzinga Staff Writer

Zinger Key Points

Critics like Jim Chanos argue many Bitcoin-heavy companies could face sharp valuation declines if crypto prices reverse.
Columbia University’s Omid Malekan warns that the crypto industry often swings from excessive optimism to painful market corrections.
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Major U.S. corporations are increasingly adding Bitcoin BTC/USD to their balance sheets, raising concerns about potential market risks as the trend accelerates under President Donald Trump's administration.

Companies like Trump Media & Technology Group DJT are driving this surge, recently announcing plans to invest around $2.5 billion in Bitcoin through stock and debt sales.

Trump's pro-crypto stance has significantly reshaped the regulatory landscape, Politico reported.

His administration's rollback of enforcement actions and push for crypto-friendly legislation have emboldened corporate America to embrace digital assets more aggressively.

According to Standard Chartered, more than 60 publicly traded companies globally now hold over 673,000 Bitcoin, valued at approximately $75 billion as of May's end.

Trump Media, among the most notable participants, is allocating substantial capital to Bitcoin, with CEO Devin Nunes calling it "an apex instrument of financial freedom."

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Trump family members, including Eric Trump, have publicly championed Bitcoin adoption at recent industry events, reflecting a broader shift in sentiment where companies view Bitcoin as a viable treasury asset alongside traditional holdings like U.S. Treasuries.

Despite the enthusiasm, several lawmakers and experts are voicing caution.

Senator Elizabeth Warren (D-Mass.) has warned that widespread corporate exposure to Bitcoin could amplify the economic fallout in the event of a future crypto crash, potentially leading to business failures and job losses across sectors.

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Nic Carter, a partner at Castle Island Ventures, likened the current buildup of corporate Bitcoin holdings to “kindling” that could fuel a market collapse.

Columbia University's Omid Malekan echoed the sentiment, pointing out the crypto industry's repeated cycles of overconfidence followed by painful corrections.

The practice, popularized by Michael Saylor's Strategy MSTR, has since been adopted by other firms like Japan's Metaplanet MTPLF and the Trump-backed American Bitcoin.

These companies raise capital at low cost through stock and debt markets and use the proceeds to buy Bitcoin, a strategy that has driven their stock prices higher.

However, critics like investor Jim Chanos argue that these gains are unsustainable.

He believes the valuations of such firms could plummet if Bitcoin prices fall, warning that many of these companies are not adding meaningful value beyond buying Bitcoin itself.

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