Analyzing Global Blockchain Concept Stocks: New High Ground for Liquidity Outside the Encryption Field

As the global financial regulatory environment gradually becomes clearer, the cryptocurrency market is shifting from a niche circle to the mainstream financial system. Recently, the results of the US election have had a positive impact on the cryptocurrency industry, with the new administration promising to adopt friendlier regulatory policies, including the establishment of a national Bitcoin reserve and encouraging the expansion of Bitcoin mining activities in the US. These commitments have boosted market confidence. Against this backdrop, multiple Blockchain concept stocks have generally risen.

Currently, more and more listed companies have realized the enormous potential of Blockchain technology and are actively incorporating it into their strategic layout. Many companies in the Blockchain concept stock sector are experiencing strong growth and gaining significant attention and investment in the market. These companies are driving digital transformation and value creation by introducing Blockchain technology, gradually becoming important players in the industry. There are prospects for even greater development opportunities in the future driven by Blockchain.

In recent years, especially with the regulatory benefits brought by the launch of cryptocurrency-related ETFs in the United States, it marks that cryptocurrencies are no longer limited to a closed digital currency market, but are deeply integrated with traditional capital markets. The assets under management of BlackRock's Bitcoin spot ETF have reached $17.243 billion, and have been in a state of net inflow almost continuously since the beginning of the year. Grayscale's Bitcoin spot ETF has an asset management scale of $13.659 billion, demonstrating investor interest and confidence in this emerging asset class.

The total market capitalization of the current cryptocurrency market is approximately $3.2 trillion, which can be divided into the following three main parts by asset class:

1. Bitcoin ( BTC ): As the core asset of the entire encryption market, its current market capitalization is approximately $1.9 trillion, accounting for over 50% of the total market capitalization of cryptocurrencies. It is not only a recognized store of value by both traditional finance and the native coin circle but also, due to its anti-inflation characteristics and limited supply, has become the preferred choice for institutional investors, earning the title of "digital gold". Bitcoin plays a key hub role in the encryption market, stabilizing the market while providing a connected bridge between traditional assets and native on-chain assets.

2. Native on-chain assets: including public chain tokens ( such as Ethereum ETH), decentralized finance ( DeFi) related tokens, as well as functional tokens in on-chain applications, etc. This field has a wide variety and high volatility, and its market performance is driven by technological updates and user demand. The current market capitalization is approximately $1.4 trillion, which is significantly lower than the market's expected high growth.

3. The combination of traditional assets and encryption technology: This field encompasses the tokenization of real-world assets on-chain (RWA), emerging projects such as blockchain-based securitized assets, etc. Currently, its market value is only a few hundred billion dollars, but with the popularization of blockchain technology and the deep integration of traditional finance, this field is developing rapidly. By tokenizing traditional assets, enhancing liquidity, it is also one of the main driving forces for future growth in the encryption market. This part is full of potential and is expected to drive the transformation of traditional finance towards a more efficient and transparent digital direction, releasing huge market potential.

Why are we so optimistic about the growth potential of traditional assets?

In the past six months, the asset attributes of Bitcoin have undergone a new evolution, and the leading forces in the capital market have also completed the transition from old powers to new funding sources.

In 2024, the position of cryptocurrency in the traditional financial sector is further consolidated. Financial giants, including BlackRock, are launching exchange-traded products for Bitcoin and Ethereum, providing both institutional and retail investors with more convenient investment channels for digital assets, which further confirms the connection with traditional securities.

At the same time, the trend of tokenizing real-world assets ( RWA ) is also accelerating, further enhancing the liquidity and coverage of financial markets. For example, Germany's state-owned development bank KfW issued two digital bonds totaling 150 million euros in 2024 using Blockchain technology. These bonds were settled using Distributed Ledger Technology ( DLT ), and the French computer equipment manufacturer Metavisio issued corporate bonds, using tokenization to provide capital support for its new manufacturing facility in India. This also shows that traditional financial institutions are leveraging Blockchain technology to optimize operational efficiency, and many financial institutions have already integrated encryption technology into their business models.

Today, a capital circulation model centered around Bitcoin as the core asset, using ETFs and the stock market as the main channels for capital inflow, and leveraging publicly listed companies like MSTR as the carrying platform, is continuously absorbing US dollar liquidity and fully unfolding.

The combination of traditional finance and Blockchain will nurture more investment opportunities than native on-chain assets. Behind this trend is the market's emphasis on stability and practical application scenarios. The traditional financial market has a solid infrastructure and mature market mechanisms, and when combined with Blockchain technology, it will unleash greater potential.

This research report will briefly analyze the growth model of Blockchain concept stocks, particularly how they combine with on-chain assets to uncover more innovative investment opportunities. For example, MSTR's issuance model demonstrates a typical path of exchanging on-chain assets for dollar assets through convertible bonds and stock issuance. Recently, MSTR's stock price has surged sharply along with the rise in Bitcoin prices, and the yield on its convertible bonds maturing in 2027 has reached a three-year high, making this strategy result in its stock performance far exceeding that of traditional tech stocks.

From these perspectives, it can be seen that the future development of the encryption market is not only about the incremental growth of digital currencies themselves but also about the enormous potential of integration with traditional finance. From regulatory dividends to changes in market structure, Blockchain concept stocks are at a critical juncture of this major trend, becoming the focus of global investors.

Blockchain Concept Stocks Classification:

1. Asset-Driven Concept:

Regarding the concept of asset allocation in blockchain stocks, the company's strategy is to use Bitcoin as the main reserve asset. This strategy was first implemented by MicroStrategy in 2020 and quickly attracted market attention. This year, other companies such as the Japanese investment company MetaPlanet and the Hong Kong-listed company Boyaa Interactive have also joined in, with increasing acquisitions of Bitcoin. MetaPlanet announced the introduction of the key performance indicator "Bitcoin Yield" (BTC Yield), with its third quarter BTC Yield at 41.7%, and the fourth quarter ( reaching as high as 116.4% as of October 25, ).

Specifically, the strategy of companies like MicroStrategy is to provide investors with a new perspective on assessing the company's value and investment decisions by introducing the "Bitcoin Yield" key performance indicator. This indicator is based on the diluted number of outstanding shares and calculates the number of Bitcoins held per share, disregarding the fluctuations in Bitcoin prices. It aims to help investors better understand the company's actions in purchasing Bitcoins through the issuance of additional common shares or convertible instruments, focusing on measuring the balance between the growth of Bitcoin holdings and equity dilution. As of now, MicroStrategy's Bitcoin investment yield has reached 41.8%, indicating that the company has successfully avoided excessive dilution of shareholder interests while continuously increasing its holdings.

However, despite MicroStrategy's significant achievements in Bitcoin investment, the company's debt structure has still drawn market attention. Reports indicate that MicroStrategy currently has an outstanding debt total of $4.25 billion. During this time, the company has financed through multiple rounds of issuing convertible bonds, some of which also come with interest payments. Market analysts are concerned that if Bitcoin prices plummet significantly, MicroStrategy may need to sell some Bitcoin to repay its debt. However, there are also views that, due to MicroStrategy's reliance on its stable traditional software business and the low interest rate environment, its operating cash flow is sufficient to cover debt interest, so even if Bitcoin prices crash, it is unlikely to force the company to sell its Bitcoin assets. In addition, MicroStrategy's stock market value currently stands at $43 billion, with debt accounting for a small proportion of its capital structure, further reducing liquidation risks.

Despite many investors being optimistic about the company's firm Bitcoin investment strategy, believing it will bring substantial returns to shareholders, there are also some investors who express concerns about its high leverage and potential market risks. Due to the extreme volatility of the cryptocurrency market, any adverse market changes could significantly impact the asset value of such companies, and their stock price has a significant premium relative to their net asset value, raising questions about whether this situation can be sustained. If the stock price corrects, it may affect the company's financing capabilities, thereby impacting its future Bitcoin purchase plans.

1、Microstrategy(MSTR)

MicroStrategy was founded in 1989 and initially focused on the field of business intelligence and enterprise solutions. However, starting in 2020, the company transformed into the world's first publicly traded company to use Bitcoin ( BTC ) as a reserve asset, a strategy that fundamentally changed its business model and market position. Founder Michael Saylor played a key role in driving this change, evolving from an early Bitcoin skeptic to a staunch supporter of encryption.

Since 2020, MicroStrategy has continuously purchased Bitcoin through its own funds and debt financing. As of now, the company has accumulated approximately 279,420 Bitcoins, with a current market value of nearly $23 billion, accounting for about 1% of the total Bitcoin supply. The most recent purchase occurred between October 31 and November 10, 2023, acquiring 27,200 Bitcoins at an average price of $74,463. The average holding price for these Bitcoins is $39,266, while the current Bitcoin price has reached approximately $90,000, resulting in a paper profit of nearly 2.5 times for MicroStrategy.

Despite facing a paper loss of about $1 billion on its Bitcoin investments during the bear market of 2022, MicroStrategy has never sold any Bitcoin and instead chose to continue increasing its holdings. Since 2023, the strong rise in Bitcoin has significantly boosted MicroStrategy's stock price, with a year-to-date return on investment reaching 26.4%, and a cumulative return on investment exceeding 100%. MicroStrategy's current operating model can be seen as a "BTC-based cyclical leverage model," financing the purchase of Bitcoin through bond issuance. Although this model brings high returns, it also carries certain risks, especially during times of significant Bitcoin price volatility. According to analysis, the company may face liquidation risk if Bitcoin prices fall below $15,000, and given that Bitcoin prices are currently close to $90,000, this risk is minimal. Furthermore, the company's leverage ratio is low, and there is strong demand in the bond market, which further enhances MicroStrategy's financial stability.

For investors, MicroStrategy can be seen as a leveraged investment tool in the Bitcoin market. With expectations of a steady rise in Bitcoin prices, the company's stock has significant potential. However, one must be cautious of the medium to long-term risks that may arise from debt expansion. In the next 1 to 2 years, the investment value of MicroStrategy remains worthy of attention, especially for investors who are optimistic about the prospects of the Bitcoin market; this is a high-risk, high-reward asset.

2、Semler Scientific(SMLR)

Semler Scientific is a company focused on medical technology, and one of its innovative strategies is to use Bitcoin as a primary reserve asset. In November 2024, the company disclosed that it recently purchased 47 Bitcoins, bringing its total holdings to 1,058 coins, with a total investment amounting to approximately $71 million. Part of the funding for these acquisitions comes from operating cash flow, indicating that Semler is attempting to strengthen its asset structure through its Bitcoin holdings, becoming a representative of innovation in asset management.

However, Semler's core business remains focused on its QuantaFlo device, which is primarily used for diagnosing cardiovascular diseases. However, Semler's Bitcoin strategy is not just a financial reserve; in the third quarter of 2024, the company achieved an unrealized gain of $1.1 million from its Bitcoin holdings. Despite a year-on-year revenue decline of 17% in that quarter, it still provided Semler with a financial hedge against economic fluctuations.

Although Semler's current market value is only $345 million, which is far lower than MicroStrategy, its strategy of adopting Bitcoin as a reserve asset has led investors to regard it as a "mini-MicroStrategy."

3. Boya Interactive

Boyaa Interactive is a company with main business.