Amid the pressures faced by companies investing in major cryptocurrencies such as Bitcoin due to market saturation and deteriorating sentiment,
Newly established companies in this sector, known as “Digital Asset Treasury Companies” (DATs),
are trending towards
Towards less popular and more volatile digital currencies,
raising new concerns about the risks of investing in traditional markets.
This shift came after a significant increase in the number of
these companies listed on the stock exchange.
Driven by pro-cryptocurrency sentiment and past successes,
The number of digital treasury companies reached at least 200
with a combined capital of approximately US$150 billion by September.
Risks of “more exotic and less liquid currencies”
According to a Reuters analysis of more than thirty company advertisements,
Cryptocurrency treasury companies have begun turning to obscure
and speculative digital currencies in an attempt to boost
their returns as the value of Bitcoin declines.
For example, companies such as Greenlane,
OceanPal, and Tharimune have announced
Recently, plans were announced to store coins such as BERA, NEAR,
and Canton Coin respectively, which are highly volatile coins.
Cristiano Ventricelli, Vice President and Senior Analyst for Digital Assets
at Moody’s credit rating agency, warned:
“Digital debt instruments are expanding towards
more exotic and less liquid cryptocurrencies,
This is precisely where the risk may be much higher.
When markets decline, there is more pressure on the equity of these companies.”
Financing pressures through private placements (PIPEs)
Many cryptocurrency treasury companies have resorted to funding
token purchases through direct private placements (PIPEs).
More than US$15 billion was raised in this way between April and November.
This mechanism allows for rapid liquidity but increases stock
price volatility by reducing shareholders’ stakes.
These risks have already become apparent; on October 10th,
Shares of companies like BitMine (which stores Ether) fell by more than 11%.
Forward Industries (which invests in Solana) holds more than 15% of the stake.
This comes against the backdrop of tariff tensions between the United States and China.
Trading at a discount to net worth
In a sign of deteriorating confidence, some cryptocurrency treasury firms
are now trading at prices below the net worth of their digital asset holdings.
According to data from The Block magazine, at least 15 Bitcoin treasury companies
It was trading below its net asset value as of Friday.
Analysts point out that companies that only buy tokens
“will suffer heavy losses in the long run.”
This prompts some of them to seek new ways to enhance value.
Such as the SUI Group launching its own stablecoins
or ETHZilla’s focus on putting traditional assets on the blockchain.
