Altcoins Use Growing as Part of Corporate Strategies

With bitcoin at record highs, other forms of cryptocurrency are catching corporate America’s attention.

That’s according to a report Sunday (July 13) by Seeking Alpha, which said companies are investing in high-profile “altcoins” such as ethereum and solana for diversification, and also as a key piece of their overall strategy.

For example, Bit Digital recently  completed its transition to an ether treasury strategy, having accumulated a little more than 100,000 tokens worth $301.8 million at the current ETH price of $3,000 per coin, the report said.

“We believe ethereum has the ability to rewrite the entire financial system. Ethereum’s programmable nature, growing adoption, and staking yield model represent the future of digital assets,” Bit Digital CEO Sam Tabar said in a statement.

He added that his company “is aligning itself with ethereum’s long-term potential and positioning itself as a focused ethereum treasury platform in the public markets.”

The report also noted that DeFi Development is raising money through convertible debt to acquire solana, while Bitmine Immersion Technologies recently announced a $250 million private placement to advance its ethereum treasury strategy.

These companies, Seeking Alpha added, have seen their stocks surge this year, while the tokens they are purchasing have fallen.

A recent report by Bloomberg News found that while bitcoin has enjoyed record highs this year, altcoins have begun to flag, dipping 50% for the first half of 2024, with ether down roughly 40% from its all-time high.

“Historically, bitcoin’s moved and then that’s passed down into altcoins,” Jake Ostrovskis, a trader at Wintermute, said in that report. “We’ve not really seen that yet this cycle.”

The move to altcoins “isn’t about abandoning bitcoin, which remains a critical macro asset and store of value,” Leah Wald, CEO of SOL Strategies, told Seeking Alpha. Rather, “it’s about diversification and positioning for the next era of on-chain utility and providing an alpha exposure vehicle for investors’ portfolios.”

In other digital assets news, PYMNTS wrote last week about stablecoins shift from a “side project of crypto maximalists or FinTech hobbyists to a new operating system for digital finance, connecting governments, corporations, developers and everyday users in real time.”

For example, Ant Group plans to integrate Circle’s USDC into its blockchain platform, while Bank of New York Mellon recently agreed to hold primary custody of Ripple’s stablecoin reserves, underlining how stablecoins are being viewed as instruments of settlement and value transfer within the traditional financial world.

“As Wall Street increasingly embraces stablecoins, CFOs are encouraged to ask critical questions about risk, governance, collateral and operations before adopting them,” PYMNTS added.