There’s a new kind of company in town, and it’s built around the premise that stock prices sometimes go up when you buy and hold a ton of crypto on the balance sheet. These so-called crypto treasury companies then raise more capital to buy more coins, and, if the coin’s price goes up, the shareholders get the returns they’re looking for.
In practice, this approach is both ingenious and risky. Before assuming these businesses are interchangeable with the underlying coins, it is worth being clear about what they are, how they work, and where the edge actually is today. So let’s look at three things that investors need to know about them.
Image source: Getty Images.