Even with a downturn in the crypto market, crypto treasury companies are continuing to buy. Strategy, the world's largest Bitcoin (BTC +0.12%) treasury company, is still loading up on Bitcoin. And Bitmine Immersion Technologies, the world's largest Ethereum (ETH +0.07%) treasury company, is still loading up on Ethereum.
For individual investors, is this a signal to buy the world's top two cryptocurrencies? Or is it just a case of throwing good money after bad, as crypto prices continue to stagnate?
Bitcoin
Strategy (the company formerly known as MicroStrategy) has made no secret of its desire to hoard as much of the world's supply of Bitcoin as it can. The company currently holds 766,970 BTC, worth nearly $55 billion at today's prices. That's roughly equivalent to 3.5% of the total lifetime supply of Bitcoin, which is capped at 21 million.
Image source: Getty Images.
What's particularly impressive about Strategy is just how steady the buying has been. In many ways, it is a dollar-cost-averaging (DCA) strategy carried out at a scale for billionaires. Over a 13-week stretch to kick off the year, Strategy acquired 90,831 BTC. The most recent purchase was a buy of 4,871 BTC for $330 million.
But here's the thing: Strategy just posted an unrealized paper loss of $14.5 billion in the first quarter, due to the deteriorating value of its massive Bitcoin holdings. The quarter before that, the company posted an unrealized paper loss of $12.4 billion.
Obviously, Strategy is counting on a near-term rebound in the price of Bitcoin, which is down nearly 45% since hitting an all-time high of $126,000 in October.
The good news is that long-term price targets for Bitcoin are sky-high. The consensus is that Bitcoin could hit a price of $1 million by 2030. According to Michael Saylor, the executive chairman and founder of Strategy, the price of a single Bitcoin is set to soar to $21 million within the next two decades.
Ethereum
Bitmine has gone on an absolutely epic Ethereum buying spree to kick off the year, and now owns 4.8 million ETH worth more than $10 billion at today's prices. That includes a recent buy of 71,252 ETH for a total of $152 million. As a result, Bitmine now owns close to 4% of all ETH in circulation.
CRYPTO: ETH
Key Data Points
While Ethereum has made a slight comeback over the past 30 days, it may be a case of too little, too late. Since August, when Ethereum hit an all-time high of $4,954, the crypto is down a stunning 55% and currently trades for just $2,200.
Again, no surprise here, but Bitmine has taken a beating as well. The stock is down 65% over the past six months, and it's getting harder to find investors willing to buy into the narrative of Ethereum as the preferred blockchain of Wall Street. Tokenization was supposed to be the one catalyst sending Ethereum to the moon in 2026, but this trend might need years to play out.
Which crypto to buy now?
While things look dicey for both Bitcoin and Ethereum right now, the better long-term play remains Bitcoin. Simply put, it has a higher ceiling and a higher floor than Ethereum.
When it comes to Ethereum, the field of Layer 1 blockchain networks is simply too crowded right now, and it's getting harder to stand out. In terms of near-peer competitors, Solana particularly stands out, given its emerging prowess in decentralized finance (DeFi).
By way of comparison, Bitcoin is regaining its cachet as "digital gold," given how well it has held up during the current Middle East geopolitical crisis. If history is any guide, it will soon rebound and continue its long march upward. But buyers will need to be patient. It takes a while to turn a big ship around.
