Bitcoin treasury companies: opportunity or risk for investors?

Bitcoin treasury companies: opportunity or risk for investors?

The discussion surrounding Bitcoin treasury companies has gained momentum in recent years. These companies, which offer their customers indirect access to Bitcoin through borrowed funds, have become significant players in the financial market. They allow investors to invest in Bitcoin through stocks, thus acting as a bridge between the crypto world and the traditional financial world. Loud IT Boltwise This could be an opportunity to attract institutional investors to the crypto market.

However, there are also voices that view this development critically. It is argued that Bitcoin treasury companies are trying to lure crypto enthusiasts into traditional financial instruments. Elon Musk already highlighted the importance of self-custody of private keys in 2021. This discussion is increasingly being pushed into the background by Bitcoin ETFs and treasury companies. Financial products offered by these companies allow investors to profit from Bitcoin price movements without directly owning the cryptocurrency.

The role of treasury companies

Stocks of treasury companies, or ETFs, that hold Bitcoin are closely linked to the prices of the cryptocurrency and are often referred to as “paper Bitcoin.” Proponents of these companies argue that they provide an easy entry point for institutional and corporate investors. An example is buying shares in a company like Strategy, which holds almost 600,000 Bitcoins. This gives companies the opportunity to profit from price fluctuations and could increase buying pressure through the continuous accumulation of Bitcoins and help stabilize the Bitcoin price.

Critics, on the other hand, do not see treasury companies as embodying the spirit of Bitcoin. These companies operate in the traditional financial sector, do not pay their employees in cryptocurrencies or accept Bitcoin as payment. Some see them as agents of the traditional financial world, luring Bitcoin investors to traditional instruments.

Security issues and market concerns

Another topic that often comes up is concerns about the security of treasury companies' strategies. A sudden Bitcoin price drop could trigger a “death spiral” that could leave companies in serious trouble. Additionally, the centralized structure of these companies could reduce their chances of recovering from a price decline. Critics argue that treasury companies' promotional activities limit the discourse on independence and self-custody.

The debate surrounding Bitcoin treasury companies remains active and complex. Despite the heated discussions about the advantages and disadvantages of these financing models, they are becoming increasingly important, which is also reflected in the financial data of various countries. Loud Bitcoin Treasuries There is an extensive list of countries with financial metrics for Bitcoin ownership. Most entries come from the USA, followed by countries such as Japan and Canada. In total, there are 141 entries comparing various economic metrics, and some of these entries show negative or zero values.