Crypto treasury firms pivot to AI

The implosion of the once-hot market for cryptocurrency treasury stocks is prompting a number of firms to pivot to artificial intelligence in an attempt to win back investors. So far, it isn’t working.

K Wave Media, a former Bitcoin accumulator that shifted to data center development, has seen its shares fall 71% since rebooting in May. Lixte Biotechnology Holdings shares have fallen 33% since agreeing to merge with a battery firm in June. And AlphaTON Capital Corp, which held alternative cryptocurrencies, has dropped 33% since it rebranded as Alpha Compute Corp in April.

They’re among at least a dozen digital-asset treasury firms, or DATs, that have turned to AI-related businesses in recent months amid a slump in crypto prices. And despite the poor stock performance, more pivots are in the works, according to law firms that spent much of last year bringing DATs to market.

“There is a lot of interest in AI and people are going to pivot to where they think their business is going to succeed,” said Toufic Adlouni, managing partner at Montreal-based law firm Renno & Co LLC, which specialises in crypto and emerging technology. “The vast majority are trying to switch gears or are dead or dying.”

Digital-asset treasury companies, which leverage their balance sheets and often sell equity to purchase cryptocurrencies, were all the rage last year when rising prices for digital tokens sent their shares soaring, often outpacing the underlying assets. But with crypto prices in freefall, many of the stocks are trading below the net value of their holdings and management teams are bailing on the business.

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It’s easy to understand why many of them are flocking to AI where vast amounts of money are flowing to companies supporting the build-out of computing infrastructure. The spending from technology giants including Alphabet and Microsoft Corp, as well as startups like OpenAI and Anthropic, has made data-center related companies the best performing stocks in the S&P 500 in 2026.

Nearly all of the top 10 performers in the benchmark this year all make products used in data centers, including SanDisk Corp, which is up more than 500%, as well as Dell Technologies, Intel Corp and Micron Technology.

By contrast, Bitcoin, the original cryptocurrency, is down 49% from last October’s peak and 27% since the start of the year through July 24. Ether has fallen 38% this year and 62% from an August 2025 record through July 24.

That’s killed demand for DATs, many of which saw their share prices double or triple after announcing moves into crypto. US and Canadian DAT stocks tracked by Bloomberg have a median decline of 43% since the start of the year.

“Last year DATs could do no wrong, and this year they’re dirty words,” said Gregory Sichenzia, founding partner at law firm Sichenzia Ross Ference Carmel LLP.

The New York-based firm, which did a lot of work on private placements for DATs last year, hasn’t received any requests for such deals since October. Instead, it’s hearing from firms wanting to look for new opportunities in AI-adjacent businesses like data centers, space exploration and small nuclear reactors.

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The crypto treasury model was pioneered by Strategy’s Michael Saylor in 2020 when his company began accumulating Bitcoin. The move tied the stock’s fortunes to the cryptocurrency, which delivered huge gains as Bitcoin surged to a record $125 000 in October 2024. Strategy shares soared more than 3 000% from the end of 2019 to a November 2024 record. But since then, the shares have tumbled 81% and the firm has been selling down its Bitcoin holdings.

Of course, crypto companies aren’t the only ones attempting to tap into investor excitement about AI. Earlier this year, shoemaker Allbirds. shifted to AI computing infrastructure after a collapse in its stock price and rebranded as Smartbird.

And there’s a long history of companies attempting to tap into the latest market trend, from adding dot-com to corporate names during the tech bubble in the late 1990s to pivots to cannabis and blockchain in the 2010s.

One group that has had better success refocusing on AI is Bitcoin miners. CoreWeave got its start in that business before its founders turned to cloud-computing services. Despite a lot of volatility and debate about the viability of its business model, the company now has a market value of $40 billion and its shares are up 80% since a March 2025 initial public offering.

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Other miners like Hut 8 Corp, Iren and TeraWulf have seen increased investor interest and some share-price recovery as they’ve retooled their data centers for AI.

To be sure, not all investors are abandoning crypto. There is still interest in other areas of blockchain technology, just not in the digital asset treasury model, according to Daniel Forman, a partner at Lowenstein Sandler LLP.

“I think DATs, as we’ve seen them, are probably done,” he said.

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