Bitcoin Treasury Stocks Carry hidden Risks, Expert Warns
NEW YORK – While Bitcoin has established itself as a recognized monetary asset, companies building treasuries around lesser-known cryptocurrencies expose investors to significant risks, according to a recent warning from Sora Ventures partner Kain Warwick. The caution comes as more firms adopt bitcoin treasury strategies, mirroring the success of companies like MicroStrategy, but possibly overlooking crucial differences in asset reliability and institutional expertise.
Warwick emphasized the need for due diligence beyond Bitcoin, stating, “Once you start to move away from Bitcoin and go down the list, you have to ask a lot of questions.” He acknowledged growing traction for Ethereum (ETH) and Solana (SOL) but cautioned that other assets may be less dependable. The comments highlight a growing concern that the rush to capitalize on the Bitcoin treasury model is leading some companies to take on undue risk with volatile and unproven digital assets.
The growth of Japanese firm MetaPlanet (MTPLF) illustrates how regulatory environments and investor incentives can influence these strategies. Japan’s tax-exempt NISA program has spurred demand for exposure through company shares rather than direct Bitcoin purchases, attracting both retail and institutional investors. Though, recent share sales and preferred share issuance by MetaPlanet demonstrate the complexities and potential pitfalls of such treasury-backed models.Warwick warned against relying solely on financial engineering, stating, ”Something exotic may not realy fly very well in crypto,” and pointed out that many listed firms lack the institutional experience to effectively manage capital markets. He noted that MicroStrategy’s rapid growth – from a $1 billion to a $100 billion market cap through Bitcoin accumulation – remains the benchmark, but cautioned that replicating that success requires more than just acquiring digital assets. The expert’s warning underscores the importance of careful evaluation when considering investments in companies holding cryptocurrency treasuries.
