Crypto treasury operations have become an attractive strategy for a class of companies in the US and, to a lesser extent, in the EU and Japan. Investors are rewarding corporate crypto holdings as the regulation of crypto intermediaries makes direct purchases much more inconvenient. The play for corporates is, however, concentrated among those whose business growth is slow and who have reserves that can be deployed. Initial success stories are pulling in another category of companies that are funding crypto asset acquisition through equity or debt. The latecomers face additional risks from leverage in the event of a slump. Large corporations have put the notion of getting into the game before their shareholders, and the answer is mixed, considering the risks involved. The message seems to be that if the bottom line is humming, it's better to stay away from cryptos.

The stock performance of companies that are on top of the crypto game is stupendous, outclassing the fancy valuations of the AI-driven boom. Stocks can be marked up beyond the crypto holdings of companies, which is a sweet spot to be in. For that to happen, a company needs to ace crypto trading, for which there isn't enough talent available within the corporate world. It is also important that the trading is largely unleveraged - an unlikely situation for companies raising debt to fund their trade. Companies issuing equity to build crypto assets also face shareholder doubt over the intent of business owners trying to lessen their skin in the game.

The recent corporate trend coincides with a boom in cryptocurrencies but is not strong enough to support prices, given the size of their holdings. If it catches on, there may be a point when corporate holdings will matter in the crypto market. Other institutions will also have to get into the game to provide stability to cryptos. Deepening the market is a less intrusive way to regulate it without resorting to extreme measures such as bans or prohibitive taxation.