9-6-2025 – A growing number of publicly listed firms are diversifying their treasury reserves by embracing a broader spectrum of cryptocurrencies, extending well beyond the familiar terrain of Bitcoin. This burgeoning trend sees companies allocating substantial sums to digital assets, with recent announcements highlighting bold moves into XRP and ETH. Notably, VivoPower has unveiled plans to bolster its reserves with a $100 million XRP treasury, while Nasdaq-listed Webus is set to commit an impressive $300 million to the same token. Meanwhile, SharpLink is charting a distinct course, earmarking $425 million for an ETH treasury.
The allure of cryptocurrency treasuries has captured significant attention throughout the year, with Strategy—formerly Microstrategy—emerging as a trailblazer in this space. According to Galaxy Research, 28 companies have embraced this approach, with 20 focusing on Bitcoin, four on Solana, two on Ethereum, and two on XRP. Yet, beneath the surface of this enthusiasm lies a thread of caution, as some firms are funding these ambitious acquisitions through debt, primarily in the form of zero- or low-interest convertible notes. These financial instruments allow investors to convert their holdings into company equity if the stock price surpasses a predetermined threshold at maturity. Should the notes fall ‘out-of-the-money’, however, companies face the challenge of securing additional funds to meet their obligations, casting a shadow over the long-term viability of such strategies.
The reliance on borrowed capital raises pertinent questions about financial stability. Firms adopting this model have several paths forward: they may liquidate their cryptocurrency reserves to generate cash, issue fresh debt to refinance existing liabilities, offer new shares to settle obligations, or, in a worst-case scenario, face default if their reserves fall short. The choice of pathway will hinge on individual circumstances and prevailing market conditions, with refinancing feasibility playing a pivotal role.
Despite these concerns, a recent Galaxy Research report on the crypto leverage landscape suggests that fears of an immediate crisis may be overstated. Most debts issued by Bitcoin treasury companies are not due until between June 2027 and September 2028, providing a buffer for strategic adjustments. While the crypto industry’s history with leverage warrants vigilance, current practices appear relatively low-risk. Nonetheless, as more companies enter this arena and debt maturities shorten, riskier approaches could surface, potentially exposing firms to greater financial strain.
In contrast, companies opting to fund their cryptocurrency purchases through equity sales face fewer pitfalls, as this method avoids the creation of liabilities or the risk of default.
