The New Proxy Game: Unpacking "The Treasury Trade" in Public Equities

By Matthew Mousa, Director Strategy & Research

May 30, 2025

A distinct pattern is emerging across public markets, one that’s giving seasoned crypto investors a serious case of déjà vu. Publicly listed companies, often outside the direct digital asset space, are making substantial allocations to cryptocurrencies, funding these ventures through equity sales like PIPEs. This isn't just opportunistic treasury management; it’s a deliberate strategy to offer shareholders a form of crypto exposure, effectively turning these companies into quasi-ETFs. Let’s call this "The Treasury Trade," and it's rapidly becoming the new frontier for proxy crypto investment, echoing the dynamics of past market cycles.

Consider the recent flurry of activity. SharpLink Gaming (NASDAQ: SBET), an iGaming technology firm, sent shockwaves through the market in late May 2025 by announcing a $425 million PIPE specifically to establish an Ethereum treasury. The stated goal? To acquire approximately 120,000 ETH, with Consensys leading the investment round which reportedly closed on May 29, 2025. SharpLink's stock erupted, soaring over 2,600% in the past week, clearly signaling pent-up demand for ETH exposure via traditional equity rails.

This is far from an isolated play. GameStop (NYSE: GME), no stranger to market fervor, revealed its own significant move on May 28, 2025: the purchase of 4,710 Bitcoin, valued at approximately $513 million. The purchase was reportedly completed in late May 2025 at an average price of $108,950 per bitcoin. While GameStop's stock reaction was more volatile, dropping nearly 11% on May 28 after the announcement, the intent to diversify into digital assets was unmistakable. Medical technology company Semler Scientific (NASDAQ: SMLR) has also been aggressively pursuing a Bitcoin treasury strategy, reporting in its Q1 2025 results that it held 3,808 bitcoins as of May 12, 2025.

The trend extends globally. In Japan, Metaplanet Inc. (TYO: 3350) has effectively rebranded itself as a Bitcoin treasury company. Its stock has seen meteoric rises, reportedly up 233% in May 2025 alone (and over 3,600% since early 2024), as its Bitcoin holdings (around 7,800 BTC, valued at over $800 million) appreciated. The company, sometimes dubbed "Asia's MicroStrategy," is also noted as being one of Japan's most shorted stocks, with analysts pointing out its market capitalization implies a Bitcoin price far exceeding the spot market. Even more niche digital assets are entering the fray. Tiger Royalties and Investments Plc (AIM: TIG), a London-listed investment firm, completed a £250,000 equity investment in Tao Strategies Singapore on May 13, 2025, to gain exposure to the Bittensor (TAO) ecosystem.

This entire phenomenon of using public equities as a wrapper for crypto exposure is powerfully reminiscent of the Grayscale Bitcoin Trust (GBTC) arbitrage trade that dominated institutional crypto circles in 2020 and early 2021. Then, the play was to subscribe to GBTC shares at Net Asset Value (NAV) and sell them at a persistent, often hefty, premium on the secondary market. This recurring theme of public equities as crypto proxies hasn't gone unnoticed by seasoned market observers. Nic Carter of Castle Island Ventures, for instance, has been part of ongoing discussions analyzing these structures, which often draw parallels to the froth and eventual reckoning seen in earlier iterations like the GBTC trade, highlighting the divided opinions on their long-term viability. That GBTC premium, of course, eventually evaporated around February 24, 2021, turning into a discount and causing significant pain for those overexposed. The question on many minds is whether The Treasury Trade is simply the next iteration, destined for a similar boom-and-bust cycle.

The motivations for companies are varied. For some, it’s a genuine belief in digital assets as a superior store of value or an inflation hedge. For others, it’s a direct appeal to a shareholder base hungry for crypto exposure without the complexities of direct ownership. The recent shift in accounting standards is a significant tailwind. The Financial Accounting Standards Board's (FASB) ASU 2023-08, effective for fiscal years beginning after December 15, 2024 (with early adoption permitted), now allows companies to measure crypto assets at fair value, with changes recognized in net income. This is a monumental improvement over the previous impairment-only model, which only allowed companies to write down losses but not write up gains until a sale.

However, not everyone is convinced The Treasury Trade is a sustainable positive. The primary concern is volatility. A company’s stock can become a de facto leveraged play on the underlying crypto asset, whipsawing with every market gyration. While this might attract speculators, it can be a nightmare for traditional investors and for the company’s core business operations if management becomes overly focused on its crypto holdings. GameStop’s stock drop after its BTC purchase announcement, despite the company’s substantial cash reserves, underscores investor apprehension about this added volatility.

Where The Treasury Trade becomes particularly intriguing, and perhaps offers a more nuanced value proposition, is when we look beyond Bitcoin. While Bitcoin treasury strategies are becoming more common, the move by companies like SharpLink into Ethereum opens up new possibilities, specifically around staking. The landscape for staking in the US is rapidly evolving. While US spot Ethereum ETFs, approved in May 2024, do not currently offer staking rewards directly to their holders, recent developments signal a potential shift. In a significant clarification on May 29, 2025, the SEC's Division of Corporation Finance stated that certain 'protocol staking' activities may not constitute securities offerings. This has been widely interpreted as a major policy change under the new leadership of SEC Chairman Paul S. Atkins, appointed in April 2025, and potentially paves the way for staking to be integrated into US ETFs. Indeed, as of late May 2025, the SEC is formally reviewing proposals, such as Grayscale's, to allow staking within their Ethereum ETF structures.

This means that, for now, investors in US ETFs miss out on the potential yield generated by securing the Ethereum network, a crucial difference from some international products. For example, Canada's 3iQ Ether Staking ETF (TSX: ETHQ) explicitly incorporates staking yield into its structure, reporting a yield of 3.83% as of May 22, 2025.

A public company holding ETH directly on its balance sheet, however, can stake that ETH (either directly or via a third-party provider) and generate yield, potentially boosting its own returns and offering a value proposition that passive US ETF holders cannot currently access, at least until US ETFs gain clarity and approval to do the same. This "productive" aspect of certain digital assets adds another layer to The Treasury Trade. It’s no longer just about price appreciation; it's about generating ongoing returns from the assets themselves. This could make altcoin treasury plays, particularly with proof-of-stake assets, a more compelling long-term strategy than simply holding Bitcoin, which offers no native yield.

Looking ahead, we can expect more companies to explore The Treasury Trade, emboldened by the new accounting rules and shareholder interest. The Bitcoin-centric plays might become increasingly crowded, their stock prices highly correlated with Bitcoin's every move, much like MicroStrategy. The real innovation and perhaps more durable strategies may lie with companies selectively adding yield-bearing crypto assets like ETH to their treasuries. These firms could offer a unique blend of crypto exposure and active asset management (staking) that isn't readily available in the current US ETF landscape, or at least, they hold a first-mover advantage as the ETF space catches up.

The risks, of course, remain. Regulatory uncertainty, while showing positive signs in some areas, persists. The operational security of managing large crypto holdings is non-trivial. And the underlying volatility of the crypto assets themselves will always be a factor. But The Treasury Trade is undeniably underway, reshaping how public companies think about their balance sheets and how investors access the digital asset class. It’s a space that warrants close attention, not just for the potential returns, but for what it signals about the increasing integration of crypto into the traditional financial system.

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Matthew Mousa is Director of Strategy and Research at Alpha Transform Holdings, where he drives insights at the intersection of blockchain, crypto, and AI. He’s also the host of the Alpha Liquid Podcast, spotlighting innovators and trends shaping the digital asset landscape. With a background in investment banking and portfolio valuation, Mousa brings a sharp, strategic lens to emerging technologies and market dynamics. Follow Mousa on X and LinkedIn.

The New Proxy Game: Unpacking "The Treasury Trade" in Public Equities

By Matthew Mousa, Director Strategy & Research

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