Bitcoin's treasury hype is set for a crash, mirroring the burst of meme coin supercycles - as predicted by Crypto Investment Firms.
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The Bubble Burst Threat looming over Crypto Treasury Firms
Here's a buzz that's shaking up the crypto world: the crypto treasury trend might burst like a bubbly memecoin supercycle. Guess who's calling the shot? Haseeb Qureshi, the shrewd mind behind crypto VC firm, Dragonfly.
In an X post, Qureshi made a bold statement aligning the 'treasury meta' with 'hot money' that'll follow the footsteps of last year's token launch mania. Qureshi predicts a lifespan of 1-2 years for this trendy investment scene before the fizz dies out.
Will Treasury Firms Crash and Burn?
Zaheer Ebtikar, the brains behind crypto fund Split Capital, echoes Qureshi's sentiments but downplays the party vibe by suggesting the lifespan will be shorter than the memecoin craze. Ebtikar suggests that as market intelligence evolves, each new trendy investment fad appears and fizzles out more rapidly.
As of June, Bitcoin and Ethereum treasuries collectively hold a whopping $367 billion in capital. Interestingly, BTC-focused firms control a massive 3.44 million BTC worth a staggering $364 billion at current market rates. On the other hand, ETH treasury firms have acquired 1.16 million ETH valued at $3 billion.
Most of the BTC inflow to public treasuries is orchestrated by Strategy and Metaplanet, but concerns have been raised about these firms' financial stability due to their high debt leverage. If they go bankrupt, there are fears of a potential market crash solely based on their significant debt obligations.
But fear not, because Alex Thorn from Galaxy Digital has stepped in to debunk these doomsday scenarios. Thorn argues that the debt worries are overblown since most of the debt maturities won't kick off until 2027.
Here's a fun fact: BTC treasuries hold $12.7 billion in debt, with Strategy accounting for $8.2B or a hefty 64% of the total debt. And guess what? Between 2027 and 2028, a whopping $10 billion of their debt stock will come due. Seems like Qureshi's timeline is on the money, huh?
Sources: Hosseeb/X, Galaxy Research
With Bitcoin and Ethereum treasuries streaking ahead in terms of returns, it's no wonder they're attracting wads of investors. But let's not forget about the elephant in the room: the upcoming 2027-2028 debt-maturity period; a risky watchlist for investors, especially if these firms fail to repay their debt. Better keep an eye out for that one!
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- Investors are pouring money into Bitcoin and Ethereum treasuries due to their high returns, but there’s an impending debt crisis looming over these firms.
- Haseeb Qureshi predicts that the lifespan of this trendy investment scene, which includes altcoins and tokens, will be 1-2 years before it fizzles out, similar to last year's token launch mania.
- Companies like Strategy and Metaplanet, which have a significant control over BTC treasuries, have raised concerns about their financial stability due to high debt leverage.
- Companies like Dragonfly and Split Capital have suggested that as market intelligence evolves, each new trendy investment fad appears and fizzles out more rapidly, making crypto finance a dynamic and risky field for investors.
