Microcap Firms Turn to Crypto for Quick Gains, Mimicking MicroStrategy’s Playbook

In a new trend gaining momentum, microcap and nanocap companies are increasingly adopting cryptocurrency as a strategic asset to boost their balance sheets and attract attention, echoing the strategy pioneered by MicroStrategy (MSTR).

Classover Holdings (KIDZ), a small education technology firm, grabbed headlines in early May when it announced plans to sell $400 million worth of shares to purchase Solana. This bold move sent its stock soaring from $1.15 to over $7 in just two days, before settling back to $3.69.

But Classover isn’t the only company jumping on the crypto bandwagon. A rising number of smaller firms are following a similar playbook: making splashy announcements about buying Bitcoin or other cryptocurrencies, hoping to spark a short-term rally in their stock prices. These firms are using cryptocurrency not as a business tool but as a headline-grabbing balance sheet item.

In a similar move, GD Culture Group (GDC), a microcap firm with a market cap around $30 million, revealed plans to sell up to $300 million in shares to buy Bitcoin and TrumpCoin, a meme coin themed around former President Donald Trump. The announcement resulted in a 13% surge in its stock price.

Meanwhile, Amber International Holdings (AMBR), valued at nearly $900 million, disclosed a $100 million investment in a range of cryptocurrencies, including Bitcoin, Ethereum, Solana, XRP, Binance Coin, and Sui.

These companies are all attempting to emulate the success of MicroStrategy, which in 2020 began using Bitcoin as its main treasury asset. The move has led to a dramatic increase in MicroStrategy’s stock price, surging by more than 3,000% due to Bitcoin’s rising value. As a result, many retail investors now view MicroStrategy’s stock as a proxy for Bitcoin exposure.

However, the small companies jumping on the crypto trend often lack the business model or transparency that MicroStrategy possesses. Take Worksport, for example, a truck bed cover manufacturer that announced plans to invest in Bitcoin and XRP. While its stock briefly spiked, the rally quickly faded, and its stock has returned to pre-announcement levels.

The strategy for these microcap firms is straightforward: announce big cryptocurrency investments, attract attention, and enjoy a temporary surge in stock price. In many cases, the proposed crypto purchases far exceed the company’s market cap, like Classover and GD Culture, which are planning multi-hundred-million-dollar allocations despite being worth much less.

It remains to be seen whether these companies will follow through on their crypto strategies and whether they can sustain interest in the long term. For now, the tactic is working in the short run, as the market continues to reward companies making crypto headlines.

Some firms, however, are taking a more serious, long-term approach. Metaplanet, a Japanese investment firm, has been consistently increasing its Bitcoin holdings since April 2024, now holding 6,796 BTC. Similarly, Semler Scientific, a U.S.-based medical device company, has been steadily adding Bitcoin to its balance sheet, now holding 3,634 BTC. These firms are modeling their approach after MicroStrategy, signaling a more committed embrace of cryptocurrency as a long-term asset.

As more companies turn to crypto for quick stock gains, the market is likely to see a mix of short-term plays and long-term strategies. Whether the crypto trend will be a passing fad for these microcap firms or a lasting shift remains to be seen, but it’s clear that cryptocurrency continues to have a growing influence on corporate decision-making.