When encryption assets become a means to enhance the market capitalization of listed companies

Recently, the U.S. stock market has seen a wave of "copycat season," with many listed companies placing their main businesses in a secondary position and turning to digital assets as a new market capitalization growth point. This phenomenon raises a key question: can the valuation game under the name of cryptocurrency continue to gain market recognition?

How do encryption assets affect corporate value?

Traditional enterprise valuation is mainly based on core indicators such as profitability, asset-liability structure, growth potential, and free cash flow. However, in the current "buying coin craze," companies are provoking a reassessment of their valuation by holding encryption assets as a financial allocation behavior.

When companies incorporate Bitcoin or other mainstream encryption assets into their balance sheets, the market often assigns them an additional valuation premium, which reflects expectations of potential price increases in encryption assets. This practice effectively places the "liquidity narrative" above the operation of the enterprise, transforming financial allocation into a core strategy of capital operation.

Short-term effects are significant, but long-term prospects are uncertain.

Undeniably, entering the encryption field can indeed stimulate stock prices in the short term. For example, a car trading service company saw its stock price soar by 280% after announcing its entry into the Bitcoin mining sector in November 2023. Similarly, some companies with mediocre performance or even facing financial difficulties are also trying to seek revaluation opportunities in the capital market through the "buy coin" narrative.

However, despite the frequent occurrence of the phenomenon "buy coins and see a surge", whether this upward trend can be sustained remains a question mark. Many "holding companies" face a correction after a short-term surge in stock prices, and if there are no continuous coin purchases or other favorable news, it will be difficult to maintain the increase.

Therefore, although the "buying coins" strategy can stimulate market enthusiasm in the short term, whether it can be transformed into a company's long-term competitiveness and sustained growth remains full of uncertainty. The market also finds it difficult to truly recognize those who merely attract attention by relying on one or two coin purchases or vague "holding coin plans" as followers.

Are speculators starting to take profits?

Despite the ongoing "buying coins to inflate valuation" narrative, some core participants seem to have quietly started to take profits. According to data, since June 2023, executives from a company that proposed the "infinite growth" theory have entered a concentrated selling period. In the last 90 days alone, these executives have sold a total of $40 million worth of stock, with the number of sales being ten times that of purchases.

Another company known as "Sol version of MicroStrategy" is also under pressure. This company previously raised $100 million to establish a Sol treasury, but its stock price has recently plummeted due to investors registering to sell large amounts of shares.

At the same time, a stablecoin issuer's stock price soared to nearly $300 shortly after its listing. However, a certain investment firm that had strongly supported it before its listing has been continuously reducing its holdings in the company's stocks, cumulatively cutting more than 36% of its position.

When "buying coins" becomes a packaging, a market capitalization tool, or even a narrative shell to evade fundamental questioning, it is destined not to be the "key" for all businesses. Today's market may be willing to pay for "financial allocation," but tomorrow's market may return to a substantive focus on business growth and profitability.

The buying behavior in the secondary market does not necessarily imply recognition; it is more likely to be a chip rotation by short-term speculators. In this valuation game, investors need to stay clear-headed, focusing on the long-term development strategy and actual operational status of the company, rather than being misled by the short-term "buying coins" craze.