Three struggling companies have recently turned to an unconventional strategy: buying Bitcoin with corporate funds rather than fixing their fundamental business problems. This trend, pioneered by MicroStrategy in 2020 and followed by companies like GameStop and Semler Scientific, has raised eyebrows among traditional investors and analysts who question the wisdom of such moves.
These Bitcoin purchases are often pitched as strategic hedges against inflation or currency devaluation. It’s a bit like buying fire insurance while your house is actively burning—addressing a theoretical future risk while ignoring the immediate flames. Companies cite Bitcoin’s scarcity and potential for asymmetric returns as justification for these investments. Bitcoin’s fixed supply of 21 million coins ensures long-term scarcity that makes it particularly attractive as an inflation-resistant alternative.
When your business model’s on fire, Bitcoin makes a peculiar choice of extinguisher.
The market reactions have been mixed, with short-term stock price boosts followed by increased volatility. When GameStop announced its consideration of Bitcoin investment for 2025, shares jumped 8.6%—a momentary sugar rush for a retailer still struggling to define its place in a digital gaming world. Similarly, MicroStrategy’s stock performance has become so correlated with Bitcoin that it practically functions as a crypto proxy on Wall Street.
Critics argue these moves represent “Hail Mary” passes from the corporate playbook—desperate attempts to create shareholder value when core business models falter. It’s like a struggling restaurant buying lottery tickets instead of improving its menu. Unlike DeFi platforms that utilize smart contracts to automate financial services, these corporate Bitcoin purchases simply represent passive holdings without productive utility.
Meanwhile, supporters view these investments as innovative financial management. The financial strategies vary—some companies use excess cash reserves while others, like MicroStrategy, issue convertible notes specifically to fund Bitcoin acquisitions. This raises important questions about corporate responsibility and resource allocation.
Regulatory and accounting challenges add another layer of complexity. With no clear framework for corporate crypto holdings, companies face reporting hurdles and potential tax complications. The cybersecurity requirements for safeguarding these digital assets present additional concerns.
As this trend continues, the line between legitimate treasury diversification and speculative gambling with shareholder funds grows increasingly blurred, leaving investors to wonder whether Bitcoin buys signal innovation or desperation.
