"It wasn't hard to see it coming. The stocks had soared too fast, the promises had gotten too big, and the math had gotten too weird. These new companies-public firms built to buy crypto and often doing little else-were supposed to offer investors a lucrative way into the digital-asset boom. Instead, as their stock prices fall and market confidence slips, the question isn't whether the model is under pressure. Increasingly, it's how, and how quietly, it could fall apart."
"Even as risky assets from stocks to corporate bonds push higher ahead of an expected Federal Reserve interest-rate cut, shares of digital-asset treasury companies are mired in a worsening slide and their tokens are slumping, too. Among the 15 DATs tracked by financial advisory Architect Partners, the average share decline last week was 15%. Cases are legion. ALT5 Sigma Corp., which holds the WLFI token issued by Trump-linked World Liberty Financial Inc., is down about 50% in just over a week."
""There are way too many of them and very little differentiation" in the U.S., said Ed Chin, cofounder of Parataxis Capital, which recently funded a South Korean Bitcoin treasury company. A majority of the well over 100 companies buying cryptocurrencies for their treasuries have launched this year, many of them small firms that recently rebranded overnight-a Japanese nail salon, a cannabis seller, a marketing agency."
Stocks of companies formed to hold cryptocurrency treasuries have plunged as market confidence wanes, exposing fragility in the business model. Shares and the underlying tokens have fallen even while broader risky assets climb ahead of an expected Fed rate cut. Among 15 DATs tracked by Architect Partners, the average share decline last week was 15%. Examples include ALT5 Sigma Corp., which is down about 50% in just over a week, and Kindly MD Inc., down around 80% from its May high. Many of the more than 100 such firms launched this year after rapid rebrands, prompting concerns over oversupply and limited differentiation.
Read at Fortune Crypto
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