A crypto analyst warns that the long-term viability of Bitcoin treasury strategies may be limited, especially for new entrants, as early adopters dominate and market dynamics favor established players. The strategy's appeal might be waning for newer firms, with concerns about sustainability and potential acquisition of weaker players by stronger ones. Despite Bitcoin's recent price resilience, the landscape is becoming more competitive and cautious, highlighting the need for sound long-term planning.
Trump Media & Technology Group plans to raise $2.5 billion to buy Bitcoin, following a strategy similar to MicroStrategy, to boost its assets and potentially its share price, amid growing corporate interest in crypto treasuries. This move aligns with Trump's political support for digital currencies and reflects a broader trend among small companies transforming into crypto holdings to leverage Bitcoin's value and the associated 'NAV multiple.' However, the strategy carries risks, as seen with the mixed performance of related stocks and the volatility of Bitcoin itself.
GameStop announced a $500 million Bitcoin purchase as part of a strategic shift from selling video games to investing in cryptocurrency, but the move has led to a 10% drop in its stock price amid investor dismay and ongoing struggles in its core business due to declining sales and store closures.
