Cryptocurrencies have started buying back their shares in an attempt to stem the slump in stock prices - FT

Companies invested in cryptocurrencies are launching share buyback programs in an attempt to support their stock prices. This is another sign that the hype around the "cryptocurrency treasury" model has started to deflate this year, according to the Financial Times.

Among the companies facing difficulties are a golf cart manufacturer and an online game developer, the FT lists. They began actively buying cryptocurrency two months ago, and now have to resort to buying back their own shares to raise falling quotes. Some are even going into debt for this purpose, the publication says.

At least seven companies have taken similar steps in recent weeks, he said. The capitalization of five of them has fallen below the value of the cryptocurrency assets on their balance sheets - as investors have growing doubts about the sustainability of the cryptocurrency business model and concerns about market oversaturation.

"For some people, this may already be a death spasm," said Kaiko senior analyst Adam Morgan McCarthy. "They're just trying to buy time, to support the business, to wait it out until they can capitalize on the next wave [of rising cryptocurrency prices]. A lot of these [players] are like a house of cards and will collapse very quickly," he added.

Some analysts view share buybacks as a sign that the cryptocurrency business model has basically run out of steam. According to Elliot Chan, a partner at cryptocurrency consulting firm Architect Partners, raising capital to buy back shares rather than buying digital assets goes against the very essence of cryptocurrency. "It's only been six months and we're already talking about their demise," the FT quoted Chan as saying.

- Biotech company 180 Life Sciences changed its name to ETHZilla in August and began actively buying Ethereum. But its stock has fallen 76% since its August peak and the startup is now valued at $416 million, although it owns $460 million worth of cryptocurrency. Last week, ETHZilla pledged its cryptocurrency assets to take out an $80 million buyback loan.

- Golf car and motorcycle maker Volcon switched to buying bitcoins in July and changed its name to Empery Digital. Its stock initially soared 380%, but then squandered all that growth. Late last week, the company borrowed $50 million to fund a share buyback. Empery's capitalization is about $378 million, though it owns $476 million worth of bitcoins.

- Vape seller CEA Industries raised investment in July from the family office of Binance co-founder Changpeng Zhao and invested in BNB, a Binance blockchain token. Shares of CEA Industries jumped nine-fold in one day, but then fell back to nearly the same level. The company launched a $250 million buyback this week.

- SharpLink Gaming, which serves the U.S. sports betting industry, launched a $1.5 billion share buyback program in August, but it didn't help: since then, quotes have collapsed by 20%. SharpLink Gaming has $3.7 billion in Ethereum on its balance sheet, with a market capitalization of $3.3 billion.

- Ton Strategy, which owns Telegram's toncoin tokens, has launched a $250 million buyback, a move the firm took after its stock price collapsed 75% from its August peak.

Despite the decline in quotations of many cryptocurrencies, some top managers are still building up cryptocurrency reserves. For example, Elon Musk's lawyer Alex Spiro, who heads the company holding the meme cryptocurrency Dogecoin (DOGE) - CleanCore Solutions- increased its reserves from 500 million to 600 million tokens last week. The company said it plans to acquire another 400 million DOGEs within a month, and in the long term it wants to accumulate up to 5% of their total turnover.

This article was AI-translated and verified by a human editor