The market's crypto treasury craze has peaked, Mike Novogratz says
Crypto treasuries have been in full focus this year amid broader bullisness in the space and as companies try and replicate the stunning success of Strategy, which pioneered the idea of a bitcoin treasury.
But one top crytpo bull thinks the trend has already peaked.
Michael Novogratz, CEO of Galaxy Digital and an early bitcoin investor, recently addressed this topic when his company reported second-quarter earnings. When asked by an analyst what he expects to see regarding crypto treasuries in the near future, Novogratz revealed that he believes the rush on creating companies with crypto-heavy balance sheets may be over.
"We are seeing a tremendous amount of opportunities there," he stated, referring to the crypto treasury space. "But I think we've probably gone through peak treasury company issuance of new companies."
Novogratz added that he is interested in seeing which existing crypto treasuries become "monsters" in the industry and will thrive when the market becomes oversaturated. "Most of them are offering similar product, and so you'll see them in different tokens, or different mixes of tokens," he said.
Even so, Novogratz made it clear that he has high hopes for the crypto treasury space. He highlighted the impact that Strategy, formerly MicroStrategy, has had on the industry as it has prioritized buying and holding bitcoin, stating, "it's probably the single most important player in the bitcoin ecosystem."
Novogratz also flagged newer crypto treasuries, including Fundstrat co-founder Tom Lee's recent ethereum treasury venture, Bitmine Immersion. The firm's tactic mirrors Michael Saylor's Strategy playbook: "accumulating digital assets, raising new capital by issuing debt or equity, and then using proceeds to buy more crypto" in hopes that it spurs growth for the market.
"I think you're gonna continue to see those companies grow, and I think the new companies in those ecosystems will have a harder time getting oxygen," Novogratz said.
He also predicted that as the crypto market evolves, new ecosystems will be formed, creating opportunity for companies. Novogratz highlighted the success with which crypto treasuries have effectively helped expand the market.
"These treasury companies have done an amazing job of bringing people into the crypto tent," he said. "I think they're gonna continue to play a pretty important part."
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