Digital Asset Treasurys Could Consolidate as Competition Heats Up – Crypto News

Digital asset treasury companies will eventually consolidate under a few larger players as the cycle matures and companies try to attract investors, said Coinbase’s head of investment research, David Duong.

Speaking to Cointelegraph, Duong said outside of strategies to boost share prices, “companies may start to pursue mergers and acquisitions, much like the recent Strive and Semler Scientific deal, as we approach the more mature phases of the DAT cycle.”

Asset manager turned Bitcoin treasury company Strive announced on Sept. 22 that it was acquiring fellow DAT Semler Scientific in an all-stock transaction.

At the same time, Duong said that DATs are also pursuing more crypto-native strategies, such as generating yields through staking or DeFi looping, which involves repeatedly borrowing and repositioning the same asset to amplify returns.

“And there’s still a lot more they can do here. I think the future will depend a lot on what happens with regulatory shifts, liquidity and market pressures to get a clearer sense of where this could all go long-term.”

On Sept. 15, Standard Chartered predicted that not all DATs will survive in the long term, forcing them to adopt new strategies or fade away. 

Crypto treasuries are hoping to dominate one token

Duong and fellow Coinbase researcher Colin Basco said in a Sept. 10 report that the DAT race has entered a player-vs-player phase, with companies battling to stand out from the competition.

Duong said recent share buybacks from crypto treasury firms in the last few weeks are a result of this new stage.

Trump Jr.-linked media company Thumzup, which holds Bitcoin (BTC) and Dogecoin (DOGE), announced on Sept. 24 that it was increasing a share buyback from $1 million to $10 million. Solana (SOL) treasury company DeFi Development Corp also expanded its share repurchase from $1 million to $100 million.

“I believe where this is coming from is that companies are under the impression that only a handful of major players will dominate each token, and they are competing to differentiate themselves through either size or financial engineering,” Duong said.

“I also think this strategy likely contributed to the negative price action observed in mid-to-late September, as these entities prioritized using capital to boost stock prices over accumulating crypto.”

Some DATs have struggled to maintain share prices, with some losing up to 90% of their value, which has been attributed to market saturation and investor concerns over the sustainability.