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Digital plus treasury companies volition yet consolidate nether a fewer larger players arsenic the rhythm matures and companies effort to pull investors, according to Coinbase’s caput of concern research, David Duong.
Speaking to Cointelegraph, Duong said extracurricular of strategies to boost stock prices, “companies whitethorn commencement to prosecute mergers and acquisitions, overmuch similar the caller Strive and Semler Scientific deal, arsenic we attack the much mature phases of the DAT cycle.”
Asset manager turned Bitcoin treasury institution Strive announced connected Sept. 22 that it was acquiring chap DAT Semler Scientific successful an all-stock transaction.
Source: Strive At the aforesaid time, Duong said, DATs are besides pursuing much crypto-native strategies, specified arsenic generating yields done staking oregon DeFi looping, which involves repeatedly borrowing and repositioning the aforesaid plus to amplify returns.
“And there’s inactive a batch much they tin bash here. I deliberation the aboriginal volition beryllium a batch connected what happens with regulatory shifts, liquidity and marketplace pressures to get a clearer consciousness of wherever this could each spell long-term.”On Sept. 15, Standard Chartered predicted that not each DATs volition past successful the agelong term, forcing them to follow caller strategies oregon slice away.
Crypto treasuries are hoping to predominate 1 token
Duong and chap Coinbase researcher Colin Basco said successful a Sept. 10 study that the DAT contention has entered a player-vs-player phase, with companies battling to basal retired from the competition.
Duong said caller stock buybacks from crypto treasury firms successful the past fewer weeks are a effect of this caller stage.
Trump Jr.-linked media institution Thumzup, which holds Bitcoin (BTC) and Dogecoin (DOGE), announced connected Sept. 24 that it was expanding a stock buyback from $1 cardinal to $10 million. Solana (SOL) treasury institution DeFi Development Corp also expanded its stock repurchase from $1 cardinal to $100 million.
Source: DeFi Development Corp“I judge wherever this is coming from is that companies are nether the content that lone a fistful of large players volition predominate each token, and they are competing to differentiate themselves done either size oregon fiscal engineering,” Duong said.
“I besides deliberation this strategy apt contributed to the antagonistic terms enactment observed successful mid-to-late September, arsenic these entities prioritized utilizing superior to boost banal prices implicit accumulating crypto.”Some DATs person struggled to support stock prices, with some losing up to 90% of their value, which has been attributed to marketplace saturation and capitalist concerns implicit the sustainability.
Share buybacks don’t adjacent success
Duong besides said that it’s his acquisition that stock buybacks whitethorn not ever effect successful a terms bump, peculiarly erstwhile the marketplace perceives the enactment arsenic a antagonistic awesome astir the company’s semipermanent health, due to the fact that it’s yet “very overmuch sentiment-driven.”
Related: Crypto treasuries hazard 50% downside connected PIPE selling pressure
“The effectiveness of buybacks hinges connected investors’ perceptions of a company’s underlying fundamentals,” helium said.
“For instance, if a DAT is utilizing buybacks arsenic a antiaircraft maneuver to trim its float, but marketplace players deliberation the institution retains an businesslike superior allocation strategy and transparent funding, past its stock terms whitethorn benefit. Conversely, the reverse is existent erstwhile the close conditions aren’t met.”TON Strategy Company, antecedently known arsenic Verb Technology Company, announced a banal buyback on Sept. 12, but investors didn’t respond positively, with shares declining 7.5%.
DATs person amassed important holdings
DATs that person added Bitcoin to their equilibrium sheets hold implicit 1.4 cardinal coins, representing astir 6.6% of the full supply, worthy implicit $166 billion.
Companies person acquired implicit 1.4 cardinal Bitcoin arsenic a treasury asset. Source: Bitbo At the aforesaid time, 68 companies person acquired a full of 5.49 cardinal Ether, worthy implicit $24 billion. Meanwhile, Solana has besides seen a ample uptake, with 9 publically tracked entities holding much than 13.4 cardinal tokens, worthy implicit $3 billion.
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