Small-cap stocks are adding Solana exposure
Struggling stocks revive fortunes with Solana treasury buys
ddRender/Shutterstock modified by Blockworks
This is a segment from the Lightspeed newsletter. To read full editions, subscribe.
There’s a refrain in crypto these days that while many in the industry expected crypto to become more like traditional finance over time, TradFi has actually just become more like crypto.
Zeitgeisty stocks can trade more like memecoins than based on any sort of price-to-earnings ratio. Robinhood offers sports betting. The president of the United States cryptically encouraged investors to buy on social media before a tariff slowdown sent public markets rocketing.
And here’s a new piece of crypto culture to add to the traditional financial world: community takeovers. The CTO happens when a crypto project’s leadership steps away or is no longer cutting it, and its public backers step in to revive its fortunes. Sam Bankman-Fried was once granted control of the SushiSwap multisig, for instance, and a more recent example came when the X profile “BuzzlamicJihad” added hundreds of millions to Aptos’ market cap by repeatedly posting: “Aptos looking good here.”
The TradFi version of a CTO comes from investors buying up niche publicly-listed stocks and announcing a crypto treasury strategy — leading the price to pump. Janover Inc. (now DeFi Development Corporation) did so recently after buying a real estate company and issuing convertible bonds to raise capital and buy Solana.
Yesterday, crypto-native market maker and investor GSR announced it had led a private placement into Nasdaq-listed Upexi alongside a group of other crypto investors. The funds were meant to back a Solana-based treasury strategy. Like DeFi Dev Corp, Upexi is relatively new to crypto. It went from selling Disney-branded products at BJ’s Wholesale Club to strategically investing in crypto via holding companies over the past year. Both stock prices surged by hundreds of percent following their crypto treasury and investment announcements.
In crypto, it’s easier to CTO a microcap memecoin than a blue-chip token, and the stock market CTO’ers seem to have learned this. Upexi had a market capitalization of $3.65 million at the end of last year, and Janover’s was $6.87 million. Both could likely have been flirting with forced delisting from the Nasdaq due to poor financial performance. Instead, the crypto saviors stepped in and offered US investors a regulated wrapper in which to gain Solana exposure.
Many have expressed doubts about the longevity of Michael Saylor’s bitcoin-buying spree at Strategy, but for the time being, the stock is a success story. And while SOL ETFs await approval, Solana folks want in on the action.
“Michael Saylor and his team pioneered some extremely capital efficient accrual mechanisms — I’m excited to see GSR through Upexi attempt to bring this mechanism to assets other than bitcoin,” DoubleZero co-founder Austin Federa, who participated in the Upexi placement alongside GSR, said in a direct message.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- 0xResearch: Alpha in your inbox. Think like an analyst.
