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Shares in bitcoin hoarders tumble to multi-month lows

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Strategy and Metaplanet ( MTPLF ) slide from summer peaks

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Spooked retail investors compound downturn, analyst says

By Tommy Reggiori Wilkes, Elizabeth Howcroft and Hannah Lang

LONDON/PARIS/NEW YORK, Sept 10 (Reuters) - Companies

that accumulate and hoard bitcoin and other cryptocurrencies

have suffered sharp drops in their share prices as the crypto

mania that has gripped investors for much of the year recedes.

These so-called digital asset treasury companies sell shares or

issue debt to raise cash for buying crypto held on their balance

sheets. Investors have been snapping up their shares, encouraged

by bitcoin's record highs this year as U.S. President

Donald Trump embraces the sector.

At least 61 publicly listed companies that are not primarily

engaged in digital assets have adopted bitcoin treasury

strategies, Reuters

reported in June

.

Shares in Michael Saylor's Strategy, the best known of

these bitcoin buyers, have fallen from $457 in July to as low as

$328 this week. That is the lowest since April and cuts their

gains this year to 13%.

Japanese bitcoin treasury company Metaplanet ( MTPLF ) this week

hit its weakest since May. The shares are down more than 60%

from their June peak but remain up 105% so far this year.

Small companies that have transformed the fortunes of their

shares - and their stock-owning executives - simply by

announcing a sudden shift in strategy to bitcoin-buying have

also taken a hit.

The scale of the reversal is "entirely unsurprising," said

Kaiko analyst Adam McCarthy.

"These are all essentially volatility plays as they are

leveraged exposure ... so if bitcoin is down 3%, they're down a

multiple of that, sometimes four or five times as much," he

said.

"For retail users it's a shock a lot of the time, so it probably

compounds the downturn when some sell out of fear."

When these shares tank, the companies' market value can be

less than the crypto holdings on their balance sheets.

Digital asset treasury companies also often rely on capital

market access to fund their crypto buying, which can "dry up

when sentiment cools," said Lale Akoner, global market analyst

at eToro.

"Beyond their bitcoin exposure, most (companies) have only

modest fundamentals, so their valuations don't have much of a

cushion."

Shares of

Smarter Web Company soared after the UK-based

website designer announced a bitcoin-buying strategy in April.

The stock is down more than 70% since June.

Shares in Alt5 Sigma ( ALTS ), which has been buying tokens in

Trump's World Liberty Financial crypto venture, have tumbled

more than 61% from their June high reached before the company

announced a $1.5 billion deal with the venture.

Bitcoin-hoarding has spread to other cryptocurrencies, too,

with more companies buying up ether and lesser-known

digital currencies.

"Until retail users realise that these firms aren't buying into

crypto, rather they're selling a crypto narrative to pump their

equity value, this circle will persist," Kaiko's McCarthy said.

Shares of Peter Thiel-backed BitMine and gaming

media network GameSquare ( GAME ) rocketed this year after they

announced plans to buy ether. Both have slumped by about 67%

since July.

Crypto exchange Gemini is set to debut on the Nasdaq on

Friday. The exchange, backed by Cameron Tyler Winklevoss,

raised the proposed price range

for its U.S. initial public offering and is targeting a

market valuation of up to $3.08 billion.