Small Cap Stocks Surge as Bitcoin Hits Record High, Institutional Demand Fuels Rally

Shares in UK-listed firms holding bitcoin surged after the digital asset hit a record high. The Smarter Web Company broke the £1bn valuation mark, while Coinsilium Group and London BTC Company posted strong gains. Bitcoin reached an all-time high of $116,781.10, driven by institutional demand and supportive policies. Ether rose nearly 5% to its highest level in five months. The surge has reinforced the upbeat outlook for companies holding digital assets on their balance sheets.

Shares in UK-listed firms holding bitcoin surged after the digital asset hit a record high of $116,781.10, driven by rising institutional demand and supportive policies from the Trump administration. The Smarter Web Company surged 20% over the week, breaking the £1 billion valuation mark for the first time. The London BTC Company and Coinsilium Group also posted strong gains.

Bitcoin's rally was powered by major institutions steadily buying the cryptocurrency, tightening supply on exchanges. Ether, the second-largest cryptocurrency, rose nearly 5% to its highest level in five months. The surge has reinforced the upbeat outlook for companies holding digital assets on their balance sheets, with businesses seeking to finance growth plans in a less traditional manner.

Active Energy Group (AEG) is a recent example. It plans to allocate up to 30% of its reserves into digital assets, with 70% in bitcoin as an inflation hedge. Diversification across Solana, Ripple, and Litecoin aims to reduce currency risk and support cross-border operations. AEG said this approach would enhance financial resilience and back its push into decentralised energy, blockchain infrastructure, renewables, and CoalSwitch, a green alternative fuel.

The trend is spreading, with digital assets increasingly used across junior mining, gold, and oil and gas, providing a financial backstop for traditional investment. Away from the excitement of bitcoin treasury strategies, the AIM All-Share, a proxy for small-cap performance, found itself flat after several weeks of outperformance, ending just 2 points higher at 772.05. This meant it underperformed its benchmark, the FTSE 100, which advanced 1% to 8,920.82 and set a record high as tariff fears faded, or at least were shrugged off by traders.

One of the week’s big risers, up 88%, was Futura Medical following the appointment of new, interim CEO. The group under former boss James Barder has achieved something quite remarkable for a small-cap by developing from first principles a fast-acting gel for erectile dysfunction that is licensed to be sold over the counter in the US as an alternative to traditional blue pills. Where it appears to have struggled is with commercial execution: though the building blocks, including a deal with consumer giant Haleon, seem to be in place. The share price movement appears to suggest that a lot of hope is being pinned on the incoming Alex Duggan, a former senior executive at Alliance Pharma who has 25 years experience in the consumer drugs space. Either that, or speculators see Futura as ripe for takeover.

Premier African Minerals also rose 88% after it restarted production at its Zulu Lithium plant in Zimbabwe. Turning to the fallers, Petro Matad dropped 33% but for arguably positive reasons. With funding starting to flow, it raised $4 million to bolster its balance sheet and, more importantly, fund value-accretive work. The Mongolian oiler will use the cash to cut operating costs at its Heron-1 well by switching from diesel to grid electricity, and to undertake low-cost testing at the Heron-2 and Gazelle-1 wells, both of which have shown signs of oil. The company will also test the Gobi Bear-1 site, where earlier analysis suggested oil may be present.

Accesso Technology Group fell 29% after confirming what many investors and analysts suspected: the market has become progressively softer. The company, which provides queuing technology for theme parks and visitor attractions, said in a trading update that it had seen 'softer than expected attendance across our customer portfolio' in the first half of the year, reducing the pool of transactions on which much of its income is based.

Finally, IP Group, while more mid-cap than small-cap, remains an interesting proxy for trends in technology and life sciences. At a recent capital markets day, management outlined its investment strategy and highlighted three portfolio companies in cleantech, deep tech, and life sciences, underlining the breadth and potential of its investments. The group has already had success with Hinge Health, now public, and cleantech firm Hysata. Deutsche Bank values the shares at 114p, double the current share price.

For all the latest small and mid-cap news, visit www.proactiveinvestors.co.uk.

References:
[1] https://www.thisismoney.co.uk/money/markets/article-14896763/Small-Cap-Movers-Bitcoin-treasuries-stocks-surge-cryptocurrency-hits-time-high.html
[2] https://ambcrypto.com/fidelity-snaps-up-1-of-all-bitcoin-as-institutional-buying-surges/
[3] https://www.investing.com/news/economy-news/malaysia-central-bank-lowers-key-rate-to-275-4127555