Today's hype isn’t limited to AI — digital assets are still in the spotlight, and the savviest players continue to take advantage of that. For example, QMMM Holding's shares recently skyrocketed more than 1,200% after the company announced a strategic shift toward cryptocurrencies and AI-based blockchain solutions. The company also revealed plans to create a $100 million crypto treasury, focused on Bitcoin (BTCUSD), Ethereum (ETHUSD), and Solana (SOLUSD). But the rally was short-lived as the stock quickly retreated.

GameStop did not fare much better. Since the company revealed in late May that it had purchased approximately $513 million worth of Bitcoin, its shares have not only failed to rise, but have actually fallen. French company Capital B has also failed to reap significant benefits from accumulating Bitcoin reserves: its shares have been in constant correction after peaking in mid-June. Therefore, when Hyperscale Data announced plans to purchase $100 million of BTC for its balance sheet, market reaction was muted.

Even the largest publicly traded bitcoin holder, Michael Saylor's MicroStrategy, is struggling. While BTCUSD has risen nearly 40% in the last six months, MicroStrategy's shares have only risen about 14%. The main reason is the company's controversial practice of repeatedly issuing new shares to finance its bitcoin purchases, which dilutes existing shareholders. In addition, MicroStrategy is currently facing two serious lawsuits:

• A class action lawsuit in Delaware, where investors allege that the company changed the terms of its preferred shares (STRK) without putting it to a shareholder vote.
• A class action lawsuit for securities fraud in Virginia, where investors claim that the company exaggerated the profitability of its Bitcoin strategy and downplayed the risks of volatility.

What is the conclusion?

Announcing a “pivot to crypto” might give stocks a short-term boost but rarely provides a basis for sustained growth. Companies need real business development for that. Without it, during major Bitcoin corrections, these “crypto” stocks often end up being even more volatile than the underlying asset itself.

Even insiders are starting to admit it. The CEO of KindlyMD Inc., a healthcare company that became a vehicle for investing in bitcoin, for example, recently warned: “We expect stock price volatility to increase for a while... For those shareholders who have come in looking for a trade, I encourage you to get out.” 

As for when the next correction might occur, the key trigger could be Wednesday's Federal Reserve meeting. If Chairman Powell takes a more aggressive tone, even if rates are cut, it could be enough to trigger a decline.