Crypto treasury share buybacks could signal a ‘credibility race’ is on

Crypto treasury companies are starting to see share price gains off the back of stock buyback programs, which analysts say could be a sign that the companies are now battling for credibility. 

Trump Jr.-linked media company Thumzup, which holds Bitcoin and Dogecoin, said on Wednesday it was increasing a share buyback from $1 million to $10 million, which sent its stock (TZUP) up 7% for the session and another 0.82% after hours to trade $4.91.

At the same time, Solana treasury company DeFi Development Corp (DFDV) expanded its share repurchase from $1 million to $100 million, which saw its stock registered gains of over 5%, before settling at a more than 2% gain and another 1% after hours to trade at $15.50.

DeFi Development Corp experienced a 8% rise after expanding its share repurchase from $1 million to $100 million. Source: Google Finance 

The gains come after Coinbase's head of research, David Duong, and researcher Colin Basco predicted in a Sept. 10 report that crypto-buying public companies are entering a “player vs player” era to compete harder for investor money.

Treasury race is becoming about credibility 

Speaking to Cointelegraph, Ryan McMillin, chief investment officer of Australian crypto investment manager Merkle Tree Capital, said the stock buybacks are a sign the crypto treasury race is starting to become a “credibility race.”

“It’s no longer enough to say ‘we hold Bitcoin.’ Investors want professional capital allocation — buybacks, dividends, clear treasury strategies,” he said.

“The fusion of corporate finance tools with the digital-asset narrative is powerful. It signals these companies want to be judged not just on Bitcoin exposure, but on shareholder returns.”

Buybacks are also a sign of confidence

Not all crypto treasury companies with buyback promises have benefited, though. TON Strategy Company, previously known as Verb Technology Company, made a similar move on Sept. 12, but its stock (TONX) didn’t react positively and declined 7.5%.

McMillin said share buybacks represent a “classic signal of confidence,” when a company thinks its stock is undervalued, which matters for listed crypto-treasury companies because “their valuations often swing at a premium or discount to their Bitcoin holdings (mNAV).”

“A buyback can tighten that gap by reducing float and showing discipline — which investors reward. The price can also move as traders look to front-run a decent volume of demand. Buying more Bitcoin increases exposure to volatility,” he said.

“A buyback, on the other hand, boosts shareholder value directly, while still leaving the crypto treasury story intact. It also appeals to a broader investor base — some want the Bitcoin narrative, others want capital discipline. A well-timed buyback balances both.”

Crypto treasury race is about Dollar vs Bitcoin 

Meanwhile, Kadan Stadelmann, chief technology officer of the blockchain-based Komodo Platform, told Cointelegraph that when a company uses cash reserves to buy back shares, there are fewer available for the general public, which leads to scarcity and upward pressure on the price.

“The crypto treasury companies are competing to see which can create the most enticing crypto treasury structure, but what we are seeing is hyperbitcoinization, which is a form of de-dollarization—Bitcoin versus the dollar,” he said.

Crypto asset treasuries not going away anytime soon 

Bitbo is tracking companies that have added Bitcoin to their balance sheets, which hold over 1.4 million coins, representing about 6.6% of the total supply.

Companies holding Bitcoin have over 1.4 million coins. Source: Bitbo 

Michael Saylor’s company, Strategy, is the frontrunner with 638,985 Bitcoin and continues to make regular purchases. Some analysts have said the crypto-buying companies market is oversaturated and not all will survive long-term. 

Stadelmann said he doesn’t think “The phenomenon of crypto asset treasuries” will slow anytime soon, though, because an “increasing number of companies will allocate part of their treasuries into Bitcoin and other crypto assets, including Fortune 500 companies.”

“A big question for investors is which companies are most likely to hold onto their Bitcoin through thick and thin, rather than sell amid bear markets or panics.”