Experts are warning that the recent surge in corporate Bitcoin treasury firms may be unsustainable due to a lack of purpose and potential pitfalls. The trend has seen companies like Strategy adopting an aggressive ownership approach, but analysts argue that it relies on new investors for revenue generation and uses complex financial products to hide the true source of yield.
Analysts such as James Check from Glassnode and Emil Sandstedt from Bitcoin Magazine have expressed concerns that failing companies may face collapse during a prolonged Bitcoin downturn. They also warn that smart money is exiting the industry, with insiders selling shares at inflated prices to retail traders.
Taproot Wizards co-founder Udi Wizardheimer notes that new players are chasing quick profits without a deep understanding of the industry and lack a clear sense of purpose. The trend could continue for some time before eventually slowing down, with weaker companies being acquired by stronger ones at discounted prices.
While some experts believe that Bitcoin treasuries could diversify in the future, exploring attainable income generation options such as lending or yield staking, these projections are still speculative. As the market outlook remains uncertain, investors should exercise caution and do their own research before taking any investment decisions.
Source: https://www.cointribune.com/en/experts-warn-bitcoin-treasury-boom-may-be-unsustainable