Revealing the balance sheet strategy of encryption companies: The timing and token selection behind the big dump in stock prices in August are key factors | Analysis of investment trends in Bitcoin and Ethereum

As the Fed's Jackson Hole Symposium approaches, many listed companies that have incorporated crypto assets into their balance sheets have seen significant declines in their stock prices. This article provides an in-depth analysis of the timing of corporate entry, token selection (Bitcoin/Ethereum/Solana) and its correlation with stock price performance, and reveals the impact of endorsements from institutional investors (such as Peter Thiel) on market confidence and liquidity.

The Balance Sheet Strategy of Crypto Assets is Now Polarized

Public companies that previously included crypto assets on their balance sheets are facing a significant drop in stock prices. The market crash in August completely shattered the rally these companies experienced weeks ago, particularly impacting the popular stocks that were highly sought after by investors during the Bitcoin consolidation period.

Market Sensitivity Soars Ahead of Fed Policy Meeting

The recent sell-off coincided with the Fed's Jackson Hole symposium — Jerome Powell's speech could lead to further declines in related stocks or trigger a rapid rebound. CNBC tracked all publicly traded companies that hold crypto assets as treasury assets and found that performance varied significantly.

New entrants have seen astonishing short-term gains but with extreme volatility.

Some companies have just entered the field of Crypto Assets. For example, the biotechnology company 180 Life Sciences (now renamed Ethzilla) announced its transformation on July 29, and investors quickly reacted, driving its stock price to skyrocket in early August, with a cumulative increase of 114% for the month, ranking first in the industry. Following closely are BitMine Immersion Technologies, focused on Ethereum, and DeFi Development Corp, which fully invested in Solana in April.

Timing to Get on Board and Token Selection are Key Variables for Returns

After laying out Solana on April 7, DeFi Development saw an increase of 2,600%, and even maintained a positive return of 8% during the market downturn in August. This performance is almost comparable to the increase seen when Strategy launched its Bitcoin Treasury plan in June 2020. However, Strategy has dropped 16% this month, confirming the importance of the timeliness of strategies. The timing of the announcement of encryption strategies by various companies is drastically different, making direct comparisons complicated. Canadian e-cigarette company CEA Industries saw a single-day surge of 550% on July 28 after announcing the accumulation of a certain mainstream CEX platform coin, but the cumulative decline in August reached 28%.

Ethereum ecosystem enterprises demonstrate stronger resilience against declines

Bit Digital abandoned Bitcoin mining in June, turning to Ethereum treasury and staking strategies, and after the announcement, its stock price rose slightly by 11%, but still fell by 6.5% within August. In contrast, the overall performance of Ethereum-related companies was more robust — the IPO plan of stablecoin issuer Circle, the passage of the "GENIUS Act", and the surge in institutional demand for Ethereum's stable chain formed key support.

Top investors endorse injecting market confidence and Liquidity

The public support of well-known investors significantly enhances the credibility of the company. After Tom Lee of Fundstrat Global Advisors took the position of chairman at BitMine Immersion, Peter Thiel subsequently acquired a 9% stake in the company and a 7.5% stake in Ethzilla. Michael Bucella, co-founder of Neoclassic Capital, pointed out: "Authority endorsement not only enhances corporate reputation but also strengthens operational credibility through legally associated executives and board members, driving revenue growth and risk control." This confidence translates into market momentum and depth, helping companies establish large-scale ATM financing plans to raise funds, expand their holdings of Crypto Assets, and enhance ecological influence.

The capability of the management determines long-term survival ability

Steve Kurz, the global asset management head of Galaxy Digital, emphasized that the quality of the management team is a core factor for the survival of crypto treasury stocks. The cases of SharpLink Gaming and ReserveOne, in which the company has invested, demonstrate that "companies that collaborate with the right partners, business models, and management teams are more likely to achieve escape velocity and ultimately develop into ecosystem-level companies that surpass short-term trends."

Conclusion

The balance sheet strategy of Crypto Assets is not a universal key. The timing for enterprises to get on board, token selection preferences, and top-tier capital empowerment together form a triangle of stock price fluctuations. As regulatory dynamics and institutional fund flows continue to evolve, differentiated strategies and management execution will become key barriers to navigating through cycles.