Bitcoin News Today: Crypto Treasury Firms Let Insiders Cash Out at 2-4x Premiums Leaving Retail Investors Vulnerable

The crypto treasury company trend, which gained momentum after MicroStrategy’s 2020 Bitcoin purchase, has evolved into a complex financial mechanism that appears to benefit insiders at the expense of retail investors. Companies such as SharpLink Gaming, Upexi, and GameStop have raised hundreds of millions through private placements or debt offerings to accumulate cryptocurrencies like Ethereum, Solana, and Bitcoin [1]. However, according to crypto analyst Ran Neuner, these entities are not net buyers of crypto but instead serve as vehicles for insiders to exchange their existing crypto holdings for shares in publicly traded companies at inflated valuations [1].

The strategy hinges on a two-step process: crypto-native investors contribute their holdings to a treasury company in exchange for shares at net asset value (NAV). Once the company announces its crypto treasury, its stock often trades at 2–4 times NAV, allowing the original investors to sell shares to retail buyers and recoup their initial crypto value while retaining the premium [1]. For example, SharpLink Gaming’s $425 million Ethereum purchase was funded by investors exchanging their ETH for shares, which immediately surged in value on public markets [1]. Neuner argues this effectively lets crypto insiders "sell" their assets at a markup without directly impacting crypto prices or triggering regulatory scrutiny [1].

The pattern is consistent across recent cases. Upexi raised $300 million to buy 1.9 million Solana tokens, while GameStop allocated $1.5 billion in convertible notes to acquire 4,710 Bitcoin [1]. These transactions often involve crypto-native funds like Arrington Capital and Pantera, which already hold significant crypto positions and have little incentive to buy from open markets [1]. The result is a system where institutional crypto holders gain liquidity and tax advantages by converting their assets into publicly traded shares, while retail investors pay 3–4 times the underlying crypto value for exposure [1].

Critics highlight the risks of this leveraged structure. Neuner compares the phenomenon to previous crypto bubbles, such as the 2017 ICO collapse and the 2021 algorithmic stablecoin failures. He warns that excessive leverage without genuine demand for crypto assets could lead to a market correction, where treasury companies trade at discounts to NAV during downturns, eroding retail investor returns [1]. "The sooner this bubble deflates, the better," Neuner argues, noting that prolonged inflation of premiums will amplify the eventual fallout [1].

While crypto treasury companies generate stock market volatility, their impact on actual crypto prices remains minimal. Neuner emphasizes that real price discovery occurs in spot markets and through ETFs, not via the financial engineering of these firms [1]. The phenomenon, he concludes, reflects speculative demand for leveraged exposure rather than genuine institutional adoption, leaving investors vulnerable to inflated premiums and market psychology [1].

Source: [1] [The Crypto Treasury Pump: Insiders Cashing Out Billions?] [https://www.forbes.com/sites/boazsobrado/2025/07/24/the-crypto-treasury-pump-insiders-cashing-out-billions/]