Euphoria is fading: investors are losing interest in shares of Strategy and other crypto companies

The sharp decline in interest in digital assets has hit the quotations of companies that bet on holding cryptocurrencies. The securities of major players, including Strategy and Metaplanet, have lost dozens of percent in recent months. Analysts call what is happening expected and explain it by the high dependence of such businesses on fluctuations in cryptocurrency rates.

Companies that have been buying and hoarding bitcoin and other cryptocurrencies have seen their quotes plummet amid waning euphoria around digital assets, Reuters writes.

Shares of Strategy, one of the most prominent bitcoin-buying companies, fell from $457 in July to $328 this week, hitting their lowest since April. The drop amounted to a 28% drop. The stock was up 1.6% in trading on Sept. 10 and is up 15% since the beginning of the year.

Japanese cryptocurrency holding company Metaplanet has hit new lows since Ma: its securities have fallen more than 62% from their June peak, but remain up 105% since the start of the year. The company's shares jumped 16% in trading in Japan on Sept. 10.

British website builder Smarter Web Company saw its shares surge after adopting a bitcoin-buying strategy, but its stock has plummeted 70% since June. On AQS Markets NXX, an alternative marketplace that trades small and emerging issuers off the main exchanges, the company's shares jumped 31.4% on Wednesday.

Shares of Alt5 Sigma, which bought tokens in US President Donald Trump's crypto project World Liberty Financial, have slipped 63% from their June high. The paper's shares were up 4.2% on Wednesday, September 10.

The trend applies to companies that have been buying not only bitcoin, but also ether and lesser-known tokens, Reuters notes. Shares of Peter Thiel-backed mining company BitMine and gamer media network GameSquare soared after announcing their intentions to buy ether, but both companies have lost about 67% since July. On Wednesday, shares of the former were up 7.8% and shares of the latter were up 2%.

The drawdown was also experienced by smaller firms, whose quotes soared after announcing a sharp shift in strategy in favor of bitcoin investments, Reuters writes.

The scale of the quote reversal, according to Kaiko analyst Adam McCarthy, is "completely unsurprising."

"Essentially, it's all a volatility play: companies are leveraged to bitcoin, so if it falls 3%, their shares can fall four or five times as much. For retail investors, this often comes as a shock, and their panic selling only exacerbates the fall," he explained.

"Until retail investors realize that these firms are not actually investing in cryptocurrencies, but are just using talk of blockchain and digital assets to drive up their stock price, this circle will continue to repeat itself," the analyst said.

Typically, these firms sell shares or issue bonds to raise funds to buy crypto-assets on their balance sheets. Investors have been actively buying their securities, inspired by bitcoin' s record growth this year and US President Donald Trump's support for the sector, the agency explains.

At the same time, Trump family members founded the cryptocurrency company World Liberty and issue their own crypto-assets (WLFI token and USD1 stablecoin), i.e. they are direct beneficiaries of the spread of blockchain technologies.

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