our new business model is to hold…

In a note to shareholders dated 25 June, Geoff Miller, TruSpine’s chair since last year, said the company would raise money to buy and hold the cryptocurrency. On the day of the announcement, the firm’s stock jumped 300% to £1.60. Investors approved the strategy at a general meeting last Friday.

TruSpine is not alone. Globally, at the latest count, 169 publicly traded companies hold bitcoin. A handful of those are bitcoin miners and exchanges, but most are so-called “crypto treasuries” – ordinary firms that have begun treating cryptocurrency as a reserve asset. This new business model emerged five years ago, but the trend accelerated in recent months as the price of bitcoin soared to new highs.

This may seem a brilliant idea for small, loss-making companies desperate to attract investor attention and so rally their share prices. But it may prove to be a speculative gamble on digital snake oil that echoes past bubbles, from dotcom hype to memestock mania.

The majority of these “crypto treasuries” are American, many spurred by President Donald Trump’s sweeping deregulation of the sector. But since May, a motley crew of London-listed companies – from one hitherto producing helium to an “agentic AI” startup – have announced bitcoin pivots.

All appear to be following the playbook of Strategy, formerly called MicroStrategy, a once-floundering data firm that began to invest heavily in bitcoin in 2020. Strategy is now the world’s largest holder of the cryptocurrency, with 629,376 bitcoin units, worth $71bn – roughly 3% of the total global supply.

Strategy’s business intelligence services have fallen by the wayside, and it now functions as a proxy bitcoin investment, albeit at a premium: its share price rises and falls almost in lockstep with the price of the cryptocurrency. Michael Saylor, the firm’s founder, is now a bitcoin evangelist, posting AI-generated images hyping the currency to his 4.5m followers on X. In one recent post, he’s sitting in a flashy casino, with the caption reading: “Make the Winning Bet.”

To mainstream market analysts such as Laith Khalaf of investment platform AJ Bell, the crypto treasury model looks “mad”. But somehow it is working – at least for now. Investors who cannot buy bitcoin directly, either for regulatory reasons or because their investment rules prohibit it, can still gain exposure by holding Strategy shares. That may go some way to explaining why the company shares trade at 30% above the value of the coins it owns. Strategy’s market cap is now $96bn, up from less than $1bn in 2020.

Its imitators have had mixed results. Metaplanet, a struggling Japanese investment firm turned hotelier turned crypto treasury, saw its shares rocket more than 2,000% after it bought $2bn of bitcoin. Others – including the first-family backed Trump Media & Technology Group, which owns Truth Social and pledged to raise $2.5bn to invest in crypto – have seen their shares rise, fall and rise again.

In the UK, the dozen companies trying this strategy are mostly loss-makers traded on the Aquis Exchange, which caters to microcaps and high-risk ventures that don’t meet the listing requirements of the London Stock Exchange.

TruSpine, which on Friday changed its name to TSP Advanced Technologies, is among them. Founded in 2014, it was built around a patented technology supposed to make spinal surgery less invasive. Some early investors have told The Observer they were “sucked in” by presentations featuring the technology’s inventor. One was convinced by a friend to invest £180,000; another put in tens of thousands, spurred on by a group of retail investors on the Telegram social media platform.

Their faith soon wavered. For years, “nothing was happening”, says one. The company kept promising it was about to submit its technology to the US regulator, but only got around to it in 2023.

In 2018, it was revealed that an outside fundraising partner had pocketed £414,500 of TruSpine’s investor money, which the firm later wrote off as bad debt. After listing on Aquis in 2020, it piled up losses and nearly £500,000 of debt. In 2023, Aquis fined it £215,000 for giving the market a distorted impression of its financial health – a penalty later partly suspended.

By 2024, the share price was a fraction of what early investors had paid and the company’s main technology still lacked regulatory approval.

Enter the new management. Miller describes himself as a “turnaround specialist”, good at “actually sorting out all the corporate governance … making sure everyone understands what on Earth they invested in in the first place, and then actually making money for shareholders”, he said in an interview with The Observer.

While he acknowledges the company’s “sketchy” past, he says that is all “ancient history”. While some might view the bitcoin treasury strategy as a wild act of speculation, Miller sees it as a real opportunity to turn the company around.

He denies trying to imitate Strategy and insists he hopes to reinvest any money earned from its bitcoin holdings in the spinal devices. “As we build the business, we’ll be looking to add to those bitcoin holdings while at the same time, on the other side of the balance sheet, looking to commercialise the life-sciences IP that we have.”

It seems an odd proposition. Investors are being asked to back both an unproven medical device and a speculative bet on bitcoin.

Miller doesn’t view it that way. “The dynamics have changed significantly with the Trump administration coming in,” he said. “We’re now in a position where you can’t ignore bitcoin.”

A spokesperson for Aquis told The Observer that the exchange is “a natural home for innovative, fast-growing companies, including some of the UK’s early adopters of digital asset treasury policies”. But it warned investors to “carefully review the disclosures and statements by admitted companies”.

AJ Bell’s Khalaf says: “My suspicion is that some people will make a lot of money from this.” But with crypto treasury companies increasingly borrowing old-fashioned money to buy crypto, a sudden price drop could force them all to sell at once, creating a nasty chain reaction in crypto and other financial markets. “I suspect the downdraft when it comes could be pretty brutal.”