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The Most Dangerous Game on Wall Street: Why Digital Treasury Companies Might Be the Next Big Scam—or the Next Big Trade

Wall Street’s 60/40 formula was born in 1952 — the same year as the first credit card. A lot has changed since.

That’s why we created a new approach — The H.E.A.T. Formula — to empower investors to spot opportunities, think independently, make smarter (often contrarian) moves, and build real wealth.

Table of Contents

🔥 Here’s What’s Happening Now

Momentum names continued to sell of a bit, again this is normal when stuff has gone up so far so fast. It could turn into something more, or it could be a buying opportunity. I’m not doing any dip buying at the moment.

The ARKK calls I sold been fairly fortuitous, up 19% in a couple of days. Just had a feeling momentum had petered out a bit there.

Lot of green this morning, the market continues to defy the bears. This could be what traders are looking at….

🎯 The Most Dangerous Game on Wall Street, Why Digital Treasury Companies Might Be the Next Big Scam—or the Next Big Trade

There’s a new playbook taking over the microcap equity market.
It’s not about profits.
It’s not about innovation.
It’s not even about crypto.

It’s about paper.
Stock certificates.
Dilution.

Welcome to the era of Digital Treasury Companies—where a Bitcoin press release can mint a $500M valuation overnight, and retail investors line up to buy into a business model that doesn’t exist.

We’re not talking MicroStrategy 2.0. We’re talking about publicly traded vehicles with zero revenue, no operations, and an infinite appetite for issuing new shares. At best, they’re speculative Bitcoin vaults. At worst, they’re legalized rug pulls.

🎭 The New Playbook: Digital Treasury Theater

Let’s walk through the con:

1. Start with a low-float microcap (ideally under $30M).
2. Issue a breathless press release: “We’re pivoting to a Bitcoin strategy.”
3. Trigger a retail melt-up via Reddit, TikTok, and algo-driven momentum.
4. File an ATM shelf, dilute into strength, buy Bitcoin, repeat.

The result?
A “treasury strategy” that relies on stock dilution to acquire BTC, and hype to maintain the illusion of value.

These companies aren’t buying Bitcoin to preserve value.
They’re buying Bitcoin to extract value—from shareholders.

🧨 The Fatal Flaw: Fiat Financing Meets Hard Cap

Bitcoin’s value proposition is scarcity—21 million, fixed forever.

Digital Treasury stocks?
They dilute like the Weimar Republic.

You’re essentially buying “digital gold” from a company that mints more paper gold every time the price rises.

It's absurd.

Why would a rational investor pay a 200–300% premium over NAV for Bitcoin exposure through a stock that systematically expands its share count?

📜 From Minsky to Meme: Welcome to Ponzi Finance

Hyman Minsky warned about this dynamic decades ago.

"Ponzi finance is when cash flows are insufficient to cover interest payments, and new borrowing is needed to pay old obligations."

These digital treasury companies are classic Ponzi finance—with a Web3 twist.

  • No cash flows.

  • No operations.

  • Just perpetual equity raises to buy an appreciating asset and hope that someone else bids the shares higher.

This isn’t “HODLing.”
It’s speculating on attention.

🧠 Cowen's Breakdown: Two Types of Treasury Plays

Cowen's recently came out with a report that brings valuable nuance. They distinguish between:

  1. Aspirational Treasuries – They raise money to buy BTC… eventually.

    • Example: CCCM + ProCap BTC, where details remain vague.

  2. Strategic Treasuries – They already know what BTC they’re buying, at what price, and from whom.

    • Example: CEPO + BSTR (Bitcoin Standard Treasury), backed by Dr. Adam Back and Cantor, with PIPE + convertible financing—and some of the funding actually contributed in Bitcoin.

Why does this matter?

Because strategic treasuries are more credible. They’re not just chasing attention—they’re buying actual Bitcoin now, often at negotiated prices.

In fact, Cowen notes these deals already trade at substantial premiums to spot BTC, implying retail is placing a speculative value on future arbitrage, consolidation, or access.

This could be the seedbed of a SPAC-based BTC vault consolidation trade—with Cantor and SoftBank already planting flags.

🧿 Genius Act = Regulatory Greenlight?

The recently signed GENIUS Act provides a loose framework for digital asset companies to operate as regulated public entities—creating the legal breathing room this trend needed to explode.

Think of it as the JOBS Act for Bitcoin treasuries. A compliance-safe path for meme stock operators to pivot into BTC accumulation—under the banner of “financial innovation.”

🐂 Bullish on Bitcoin? Buy Bitcoin.

If you’re bullish on crypto, buy Bitcoin.
Not the paper shell of Bitcoin. Not the third derivative.

Buying a Digital Treasury stock for BTC exposure is like buying a futures ETF… with a 200% management fee, no cap, and unlimited dilution risk.

🏆 Potential Players (Rated 1–10)

Ticker

Company

Rating

Commentary

MSTR

MicroStrategy

10

Still the king. Clear treasury thesis, smart leverage, competent CEO. Trades rich—but it earned that premium.

DJT

Trump Media & Tech

8

Political meme energy. Big war chest. With Trump backing BTC, DJT could become the de facto MAGA crypto proxy.

21C

Twenty One Capital (CEP SPAC)

7

Backed by SoftBank and Tether. Has the war chest and structure to become a BTC “vault” SPAC. Still pre-DA.

BSTR

Bitcoin Standard Treasury (via CEPO)

7–8

Backed by Adam Back. Real BTC acquisition, real funding, real plan. High watchlist candidate.

SBET

SharpLink Gaming

2

ETH pivot was all sizzle, no steak. Little substance beyond the PR.

KWM

K Wave Media

4

K-Pop meets crypto. Wild retail action, but no business plan. Mostly air.

CCCM

Columbus Circle SPAC

5–6

Early stage. Structure looks like a future BTC warehouse, but lacks clarity.

❓Should You Play This Game?

As a trader?
Yes—if you're early and nimble. These stocks can move 100–500% on one press release.

As an investor?
Hell no.

This is a greater fool game. These companies aren’t building businesses—they’re building share counts. You’re not investing. You’re speculating on attention, dilution timing, and TikTok trends.

📊 Measuring the Madness: $4 Trillion = Peak Speculation?

Crypto just touched a $4 trillion market cap—about 7% of the S&P 500’s valuation and 13% of GDP.

It’s nearing peak 2021 levels—the same environment that brought us SPAC-mania, NFT apes, and negative real rates.

Speculative fever is back. Digital Treasuries are the latest fever dream.

They’ll rise fast.

And they’ll implode faster.

What about UPXI?

✅ What Upexi Is Doing

  • Solana treasury company: Upexi holds 1.82 million SOL (~$331 M), up 147% since June. 56% of that was acquired in locked form at a discount. (Upexi, Inc.)

  • Staking yield: By staking nearly all its SOL, it’s projecting ~$26 M annually—around an 8% yield relative to its holdings. (GuruFocus)

  • NAV premium: Trading at ~1.2x basic NAV (market cap ~$402 M vs treasury $331 M) and ~2.1x on a fully diluted NAV basis. (Upexi, Inc.)

  • Capital raises: Recently closed ~$200M in private placements and convertible notes, fueling further SOL purchases. (Upexi, Inc.)

  • Tokenization push: Planning to tokenize its shares via Solana (Opening Bell) to enable 24/7 on-chain trading and programmable equity features. (Coin Central)

⚖️ Key Pros & Cons

🟢 Pros

🔴 Cons

Yield generation: 8% staking yield provides real revenue vs pure appreciation plays. (Stock Titan)

Dilution risk: More capital raises may continue to dilute existing shareholders—echoing the pitfalls of “digital treasury” shells.

Discounted buys: Locked Solana purchases enhance upside potential. (Upexi, Inc., GuruFocus)

Tokenization uncertainty: Real benefits or just tech flair? Execution risk in converting shares to tokens. (Coin Central)

Regulated structure: Public company with compliance, audited treasury — more institutional than TikTok pump-and-dumps.

Single-asset exposure: If SOL corrects hard, UPXI could trade below NAV (again); e.g., it plunged 60% when over 43M shares hit the market. (The Block)

Structured growth: Buying at scale, staking, and swap yield—closer to a real asset manager than shell play.

Still speculative: No operating business; value relies solely on SOL’s performance and ongoing capital raises.

⚠️ Comparing Upexi to Bitcoin Treasury Shells

Similar to BTC treasury SPACs, Upexi uses equity issuance to buy crypto. But there are three key differentiators:

  1. Yield-generating: The staking income creates recurring cash, unlike pure BTC treasuries that just HODL.

  2. Discount purchasing: Locked SOL buys give a built-in margin.

  3. Compliance and transparency: Fully reporting and regulated, not shell-level opacity.

However, the dilution risk remains—if the market tires, UPXI may underperform. The plunge after the share dump is a red flag: crypto treasuries can trade well above NAV during rallies, but crash just as fast.

🧭 So… Is Upexi Worth Considering?

  • For traders: Yes, especially if you're playing Solana's momentum and SPAC-like rerating plays.

  • For long-term investors: More borderline. The staking yield is compelling, but Upexi is still fundamentally tied to SOL’s price and its ability to execute disciplined capital strategy.

  • Your stance: If you believe in Solana’s long-term growth and evolving on-chain financial markets, Upexi stands out as a structured, yield-generating vehicle—more than just a hype-fueled dilution machine.

🔍 TL;DR: Upexi isn't a malicious shell, but a hybrid: part crypto treasury, part yield manager, part tokenization pioneer. It's far more sophisticated than Twitter-fueled scheme plays—but still very much a speculative wager on Solana's future.

🚨 Final Thought

Digital Treasury companies are a symptom of this liquidity cycle’s final euphoric phase.

They offer no cash flows.
No moats.
No long-term edge.

But in a world of attention-driven trading, they don’t need to.

They’re built for animal spirits.
And when the music stops, it won’t be Bitcoin that crashes.
It’ll be the paper promises pretending to hold it.

📈 Stock Corner

Today’s stock is ASML Holding (ASML)…..

You need their product to make AI work. Technically this is a short on a break of the 200 day moving average, so I wouldn’t buy it here. There is some support in the 680 area and you could also look for an undercut and rally at the 200 day.

📬 In Case You Missed It

“Personally I’m holding onto it,” Tuttle said. “We’ve got, again, Don Jr. involved. People in Trump’s inner circle. Their endeavors tend to go well.”

🤝 Before You Go Some Ways I Can Help

  1. ETFs: The Antidote to Wall Street

  2. Inside HEAT: Our Monthly Live Call on What Wall Street Doesn’t Want You To Know

  3. Financial HEAT Podcast https://www.youtube.com/@TuttleCap Freedom from the Wall Street Hypocrisy

  4. Tuttle Wealth Management: Your Wealth Unshackled

  5. Advanced HEAT Insights: Matt’s Inner Circle, Your Financial Edge

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