Companies adding underperforming altcoins to their balance sheets are muddying the broader treasury narrative, says Bitcoin treasury company Nakamoto CEO, David Bailey.
“The treasury company moniker itself is confusing,” Bailey said in an X post on Sunday.
“Toxic financing, failed altcoins rebranded as DATs, too many failed companies with no plan or vision. It’s totally muddled the narrative,” Bailey said.
David Bailey says the sector is “being tested”
Bailey emphasized that “the core strategy is to build and monetize your balance sheet.”
“If you can do it well, you will grow your assets over time; if you do it poorly, you will trade at a discount and be consumed by someone who can do it better,” he said.
“The bitcoin treasury company of the fiat system is a bank. Today we are building Bitcoin Banks. If you’re afraid of that term, call them Bitcoin financial institutions.”
Bailey said that the entire treasury sector is “being tested.” His comments come as publicly-listed companies are starting to look beyond Bitcoin (BTC) and down the risk curve for other crypto assets to add to their treasuries. On Aug. 2, it was reported that Nasdaq-listed Mill City Ventures III may raise another $500 million under an equity agreement to fund its recently announced Sui treasury strategy.
Narrative-driven theses are driving firms to expand their treasuries beyond Bitcoin, Galaxy Digital said in a July 31 report. Ether (ETH), Solana (SOL), XRP (XRP), BNB (BNB), and HyperLiquid (HYPE) are among the cryptocurrencies gaining traction outside of Bitcoin.
Bitcoin held in publicly-traded companies is approximately $117.91 billion at the time of publication, according to BitcoinTreasuries.NET.
Ether is gaining traction as an alternative because it can also be staked for annual returns, making it a store of value and a source of income. Approximately 3.14% of Ether’s total supply is held in publicly-listed treasury companies, according to StrategicETHReserve.
Expanding interest may be the reason for Bitcoin’s sideways price
Galaxy Digital CEO Mike Novogratz said treasury companies showing interest in the broader crypto market may be the reason for Bitcoin’s sideways price action in recent times.
“Bitcoin’s at a consolidation right now. Partly because you’re seeing a lot of these treasury companies in other coins take their shot,” Novogratz said.
Related: Altseason index hits highest level this year: Here’s what traders think
While altcoins in treasuries have faced some scrutiny, questions have also been raised about Bitcoin treasuries.
Venture capital firm Breed said only a few Bitcoin treasury companies will stand the test of time and avoid the vicious “death spiral” that will impact BTC holding companies that trade close to net asset value (NAV).
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