Market analyst James Check from Glassnode recently suggested a shrinking lifespan for the Bitcoin treasury strategy, casting doubts on its longevity for new companies entering the crypto sphere.
“The Bitcoin treasury approach may have a shorter shelf life than many anticipate,” Check shared on a recent post. He further indicated that for numerous late entrants, “it might already be over,” emphasizing the importance of a sustainable product and strategy for long-term Bitcoin (BTC) accumulation rather than a race for size.
Check expressed concerns about the increasing struggle for new Bitcoin treasury companies to gain traction, as investors seem to prefer early birds in the sector. “The 50th Treasury company is not what anyone wants,” stated Check.
As per the data from BitcoinTreasuries, up to Friday, at least 21 entities adopted Bitcoin as a reserve asset in the last 30 days. The largest public Bitcoin treasury, spearheaded by Michael Saylor (MSTR), possesses 597,325 BTC, while MARA Holdings, in the second position, owns 50,000 BTC, roughly a tenth of MSTR’s holding.
While new Bitcoin treasury firms may draw in retail speculators, Check cautions that these firms don’t have “infinite money.” He noted that despite his bullish stance on Bitcoin’s price, which is currently trading around $107,990, the future seems uncertain for newer firms.
Check concurred with Udi Wizardheimer, co-founder of Taproot Wizards, that some companies might misuse the Bitcoin treasury strategy for fast earnings without appreciating its long-term goals. “Many raising funds see easy money but lack understanding of what they are getting into,” Wizardheimer remarked.
Recently, questions have arisen regarding companies adopting the Bitcoin treasury strategy. A report by venture capital firm Breed on June 29 suggested that only a handful of Bitcoin treasury firms will survive the harsh “death spiral” affecting BTC holding companies trading near their net asset value (NAV).
Fakhul Miah, managing director of GoMining Institutional, voiced his concern about “the copycats” in a conversation with Cointelegraph. He warned about companies attempting to establish Bitcoin banks without adequate protections or risk management, stating that if these smaller firms falter, Bitcoin’s reputation could suffer a blow.
