Bitcoin Treasury Stocks โCarry hidden Risks, Expert Warns
NEW YORK – While Bitcoin has established itself as a recognized monetaryโ asset, companies building treasuries around โคlesser-knownโ cryptocurrencies โexposeโข investorsโ to significant โขrisks, according โคto a recent warning from Sora Ventures โฃpartnerโฃ Kain Warwick. Theโข caution comes as โคmore firms adopt bitcoinโ treasury strategies, mirroring the success of companies like MicroStrategy, but possibly overlookingโ crucial differences โฃin asset reliability and institutional expertise.
Warwickโ emphasized the need for due diligence beyondโ Bitcoin, stating, “Once you โstart to moveโ awayโ from Bitcoin andโ go down โขthe โlist, you have to ask a lot ofโ questions.” He acknowledged growingโค traction โfor Ethereum (ETH) and Solana (SOL) butโ cautionedโ that other assets may be less dependable. The commentsโ highlight a growing concern that the rush to capitalize onโฃ the Bitcoin treasury modelโข isโ leading some companies to take on undue risk with volatile and unproven digitalโข assets.
The growth of Japanese firm MetaPlanet (MTPLF)โฃ illustrates how โคregulatory environments and investor incentives can influence these strategies. Japan’s tax-exemptโข NISA program has spurred demand for exposure through company shares rather than direct Bitcoin purchases, attractingโฃ both retailโค and โคinstitutional investors. โThough,โ recent share โsales and preferredโ share issuance by MetaPlanet demonstrate โฃtheโ complexities and potential pitfalls of such โtreasury-backed models.Warwick warned โขagainst relying solely on financial engineering, stating, โข”Somethingโ exotic may not realy fly very well โin crypto,” and pointedโ out that manyโข listed firms lack the institutional โขexperience to effectively manage capital markets. He noted that โฃMicroStrategy’s rapid โขgrowth – from a $1 billion โtoโ a $100 billion market โขcap through Bitcoinโค accumulation – remains the benchmark, but cautioned that replicating thatโ success requires more thanโค just acquiring โdigital assets. The expert’s warning underscores the โฃimportance of carefulโค evaluation when considering investments in โฃcompanies holding cryptocurrency treasuries.