Crypto Assets Treasury Trends: Diversification of Corporate Reserves

Recently, the trend of listed companies establishing crypto asset treasury is expanding from Bitcoin to more crypto assets, with the allocation scale also continuously increasing. In the past week, two listed companies announced plans to purchase a certain crypto asset as treasury reserves, and another company stated that it is acquiring Ethereum as reserves.

The Bitcoin treasury company has been the market focus for most of this year, with a well-known company in the lead. It is reported that two listed companies have announced intentions to initiate a $100 million and a $300 million treasury of a certain Crypto Asset, while another company announced the establishment of a $425 million Ethereum treasury.

Currently, 28 crypto assets treasury companies have been accounted for: among them, 20 focus on Bitcoin, 4 on a certain public chain token, 2 on Ethereum, and 2 on a certain crypto asset.

Considering the existing company's development momentum and the strong market interest in large-scale multi-asset allocation, the trend of Crypto Assets treasury is expected to continue to develop. However, as more and more Crypto Assets treasury companies emerge, skepticism is also on the rise.

The main concern lies in the source of some of the purchasing funds: debt. Some companies rely on borrowed funds, primarily zero-interest and low-interest convertible notes, to purchase treasury assets. This practice may pose certain risks, especially when the notes mature and the company's stock price is below the conversion price, which may require additional funds to repay the debt.

In addition, these companies may face the risk of insufficient cash to pay interest on their debts. In the face of these potential issues, treasury companies typically have four options: sell crypto assets reserves, issue new debt, issue new shares, or default. The specific course of action will depend on the market conditions and the company's situation at the time.

In contrast, the method of funding asset purchases through equity sales is relatively robust, as the company does not have to bear the risk of default or additional liabilities.

According to recent research, most of the debt issued by the Bitcoin treasury companies will mature between June 2027 and September 2028. Therefore, there may not be an imminent threat in the short term. However, as the debt maturity date approaches and more companies adopt this strategy, the situation may change.

While concerns about the debt-driven strategies of treasury companies are not unfounded, this approach does not seem to pose significant risks at the moment. Even in the worst-case scenario, these companies have various traditional financial options to cope with difficulties, rather than necessarily having to resolve issues by selling treasury assets.

Overall, the trend of Crypto Assets treasury is rapidly developing, and corporate reserve strategies are also diversifying. Although there are some potential risks, the market remains optimistic about this trend. In the future, how companies balance risk and return will be key to the development of Crypto Assets treasury.