Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
A growing trend among public companies, dubbed “crypto treasuries,” sees businesses issuing debt or equity to acquire and hold significant amounts of cryptocurrencies as reserve assets. While Bitcoin and Ethereum have been primary targets for this strategy, a new wave of companies is now setting its sights on Ripple’s XRP, with some firms like VivoPower and Nature’s Miracle Holding already announcing substantial allocation plans.
The MicroStrategy Playbook
The concept of a “crypto treasury” was notably pioneered by MicroStrategy (formerly Strategy), which has become synonymous with accumulating large quantities of Bitcoin. The company’s strategy involves raising capital through new debt and equity issuances to fund these Bitcoin purchases, aiming to hold the asset for the long term.
This approach has seen MicroStrategy’s shares gain 173% in the last 12 months, outperforming Bitcoin’s 99% increase during the same period. Its success has inspired other businesses to adopt similar models, leveraging their public status to gain exposure to the crypto market.
Expanding Beyond Bitcoin
The initial success with Bitcoin led to its adoption by other firms, such as Semler Scientific, which formalized its Bitcoin treasury approach in 2024 and continues to announce its accumulation targets. This trend has since expanded to a “second and third wave” of crypto treasury companies.
These newer entrants are now acquiring hundreds of millions of dollars’ worth of other popular cryptocurrencies, including Ethereum, Litecoin, and even Dogecoin. Like MicroStrategy, these businesses primarily rely on debt or equity issuance to finance their chosen crypto asset purchases.
XRP Emerges as a New Target
With the market now accepting a broader range of cryptocurrencies as reserve assets, the door has opened for companies to establish XRP-focused treasuries. The Motley Fool reports that several companies have begun accumulating XRP for their balance sheets, signaling a potential new phase in the crypto treasury trend.
For instance, VivoPower announced an XRP-focused crypto treasury strategy in late May, supported by a $121 million private placement aimed at buying and holding XRP and building its internal decentralized finance (DeFi) capabilities. Similarly, Nature’s Miracle Holding established a $20 million XRP treasury program in July, funded via a registered equity facility.
According to The Motley Fool, at least 10 other XRP-targeted treasury businesses and purchasing plans are rapidly forming, with some proposing allocations as high as $500 million.
Investor Considerations and Risks
For investors, buying shares in a crypto treasury company is not equivalent to directly owning the underlying cryptocurrency. While these stocks may offer leverage and potentially outperform the crypto asset in a strong bull run, they introduce additional risks.
The Motley Fool highlights that investing in a crypto treasury stock adds operating risk, financing risk, and dilution risk on top of the inherent volatility of the cryptocurrency itself. Factors such as management decisions on stock issuance, debt timing, and overall execution can significantly impact shareholder returns.
Direct Ownership Recommended
Given these complexities, The Motley Fool suggests that for most long-term investors seeking exposure to the potential upside from corporate XRP accumulation, the simpler and safer route is to buy and hold XRP directly. This approach allows investors to benefit from any price increases driven by treasury demand, while avoiding the risks associated with a small public company’s balance sheet and operational decisions.
The publication advises investors to own the asset they truly desire, rather than an indirect claim through a company, unless they specifically intend to take on the added leverage and management risk.
