How the Infinite Money Bug on the Stock Market Broke

The fall of the crypto market has crushed the infinite money bug—a market scheme that public companies holding cryptocurrency on their balance sheets had profited from for several years. Now, some of these players are urgently trying to repackage themselves into businesses related to artificial intelligence, but investors are not rushing back: the old model no longer works, and the new one looks unconvincing.

How Companies Turned Cryptocurrency into a Growth Engine for Stocks

The mechanism emerged after 2020. One of the first and most notable participants was MicroStrategy. It began actively buying Bitcoin for its balance sheet and unexpectedly launched a self-sustaining cycle that appeared to be a perfect machine for capital growth for nearly five years.

The scheme relied on several steps:

• The company issued shares or convertible bonds, raised money in the market, and bought cryptocurrency with it;
• The crypto assets on the balance sheet appreciated, partly due to these purchases, attracting speculators and driving up capitalization;
• When the market valuation of the company exceeded the value of its cryptocurrency reserves, there was an additional incentive to issue new shares and buy more assets;
• If, after such an issuance, the reserves per share were greater than before, the market had a new reason to raise the company's valuation, and the cycle would restart.

The key indicator here was the ratio of market capitalization to the value of assets on the balance sheet. As long as it remained above one, the model seemed almost foolproof: the company could attract new capital, buy more cryptocurrency, and thus strengthen its investment narrative.

At its peak in 2024, MicroStrategy, which later changed its name to Strategy, saw its shares rise by about 3000% compared to the end of 2019. This success spawned a wave of imitators: around 150 companies emerged in the market that bet on aggressive accumulation of digital assets. In about 80% of cases, the main asset was Bitcoin.

Why the Infinite Money Bug Stopped Working

The main risk of this structure became a reality after cryptocurrencies peaked in the fall of 2025 and then mostly declined. Since then, Bitcoin has lost more than a third of its value, and Ethereum has halved in price.

When prices began to fall, the previous logic turned against the companies themselves. The decrease in the value of cryptocurrencies reduced collateral for loans and forced them to return some of the raised funds. To do this, they had to sell the same crypto assets, which put even more pressure on the market. Instead of driving up capitalization, a downward spiral ensued.

As the crypto market faltered, companies with large digital reserves quickly lost their appeal to investors. In the U.S. and Canada, such players lost an average of 43% of their capitalization since the beginning of 2026. Strategy lost more than 20% of its value during the same period, and its shares fell by more than 70% from the summer highs of 2025.

For the market, this was a painful shift in sentiment. Just recently, such companies were seen as a way to gain an enhanced bet on the growth of cryptocurrencies. Now they increasingly resembled non-playable characters in someone else's script: dependent on the movement of coins but no longer able to manage investor attention as they once did.

Attempt to Shift to Artificial Intelligence

To maintain market interest, at least a dozen companies with cryptocurrency on their balance sheets attempted to reposition themselves and move into a hotter topic—artificial intelligence. However, this pivot did not work for everyone.

K-Wave Media abandoned its previous focus on Bitcoin accumulation and turned to data centers, but afterward, its capitalization fell by almost 87%. Lixte Biotechnologies, which also invested in cryptocurrency, lost about 40% of its value after merging with a battery developer. AlphaTON Capital, which had been accumulating altcoins, saw its value drop by about half after transitioning to cloud computing.

Investors seem to distinguish between a real operational base and a mere change of signage. The transition from a cryptocurrency narrative to an artificial intelligence theme does not guarantee trust if the company lacks resources, infrastructure, and a clear economy for the new business.

Who Successfully Made the Shift

Cryptominers managed to change direction better than others. They already had computing power, so the transition to infrastructure for artificial intelligence appeared much more convincing.

CorVive, one of the first companies to make such a pivot, has more than doubled in value since its initial public offering in 2025. Investor attention has also been drawn to Hut 8, Iris, and TerraWolf.

Interest in cryptocurrencies has not completely disappeared. Since August 19, Bitcoin has recovered by about 20% amid a short squeeze. But this was not enough to revive the previous model of companies with digital assets on their balance sheets.

The market seems to be entering a new phase without the infinite money bug. The scheme that allowed for years to build reserves, issue shares, and support capital growth has exhausted itself: after the reversal of crypto prices, it ceased to be an accelerator and turned into a source of pressure.