Education Tech Firm Classover Holdings (KIDZ) said it will sell $400 million worth of shares to buy Solana in early May. The inventory exploded even higher. The thinly traded company’s shares have surged from $1.15 to just over $7 in two sessions, with a shy market capitalization of $50 million, returning to its current $3.69. .
Classover is not the first company, nor the last to experience a surge in crypto.
The ambiguous number of micro-cap and nano-cap companies are using cryptocurrency not as a business line or payment method, but as a headline-grabbing balance sheet item. They often follow the same script. Announcements of changes in strategies to hold digital assets such as Bitcoin and Solana are followed by stock price pop.
Today, GD Culture Group (GDC), a company with a market capitalization of around $30 million, announced plans to sell up to $300 million in shares to buy Bitcoin and Trump Coin (Trump), a meme token about US President Donald Trump. The company has declared the purchase to be part of a new “crypto assets financial strategy.” The stock rose 13% on the news.
Also today, Amber International Holdings (AMBR) said it would allocate $100 million to a basket of cryptocurrency, including Bitcoin and Ethereum, at just under $900 million. ETH$2,461.27Solana, XRP$2.51Binance Coin BNB$659.30 and sui sui$3.91.
They are all trying to mimic the original corporate crypto evangelical strategy (MSTR). In August 2020, the enterprise software company pivoted to use Bitcoin as a major Treasury protected asset. Since then, its stock has skyrocketed over 3,000%, fueled by the price of Bitcoin, rather than by the sale of software or product innovation. Today, many retail investors treat stocks as proxy for exposure to Bitcoin.
But while the strategy has had a consistent and transparent strategy with years of business, its chairman Michael Saylor has emerged early as a supporter of Bitcoin, these new companies seem to be leveraging Crypto Hype Machine mostly through track record and follow-through.
Please visit Worksport, a manufacturer registered with NASDAQ for truck bed covers. Last year, the company announced plans to invest its cash reserves in Bitcoin and XRP. The stock, which had been slipping over for years, flew after its announcement. However, the rally did not last long, and the stocks then returned to pre-announcement levels. The company said in April it made its first six-figure purchase.
“We are still bullish and held in our first position. We will consider adding futures if necessary,” the spokesman told Coindesk at the time.
The playbook seems simple: find a lively crypto token, announce purchases or strategic allocations, and ride a temporary surge in retail investors’ attention. In many cases, the amount the company plans to invest is well above its own market capitalization. That was true for Classover and GD Culture, both proposed allocations of hundreds of millions of dollars, despite the value of a portion of it.
It is unclear whether these companies will actually make the proposed purchase or plan to raise funds. However, market responses show patterns. Microcap companies use cryptography as their megaphone.
Still, tactics have proven effective in the short term. As long as the market rewards crypto-related headlines with inventory gatherings, SMEs may continue to jump on the bandwagon.
It remains to be seen whether any of them will become long-term cryptanars like Strategies.
However, there are some companies that seem to take the strategic route more seriously and look at the outcome. Since launching its Bitcoin Finance business in April 2024, Japanese investment company Metaplanet has steadily expanded its Bitcoin Holding to 6,796, establishing its position as one of Asia’s most committed corporate holders.
Similarly, US-based medical device company Semler Scientific has consistently purchased Bitcoin since its adoption as a spare asset. Currently, it holds 3,634 BTC on its balance sheet, reflecting a strategy that reflects MicroStrategy’s playbook, rather than simply borrowing headlines.
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