As the digital asset treasury (DAT) sector matures, major consolidation is expected among key players, according to Coinbase’s head of investment research, David Duong. Companies are likely to seek mergers to attract investors, similar to the recent deal between Strive and Semler Scientific.
Duong discussed this trend with Cointelegraph, stating that beyond enhancing share prices, “mergers and acquisitions may become more common, especially as we approach advanced stages of the DAT cycle.”
On September 22, Strive, a Bitcoin treasury company, announced it was acquiring Semler Scientific in an all-stock deal.
Simultaneously, Duong mentioned that DATs are increasingly adopting crypto-centric strategies, like yielding through staking and DeFi looping, where the same asset is borrowed and repositioned to increase returns.
“There’s still much more potential here. The future hinges on regulatory developments, liquidity, and market pressures, which will shape the long-term trajectory of this space.”
On September 15, Standard Chartered suggested that not all DATs will thrive, prompting some to either innovate their strategies or exit the market.
Crypto treasuries eye dominance over single tokens
Duong and colleague Colin Basco noted in a September 10 report that the race among DATs has turned competitive, with firms striving to distinguish themselves from their rivals.
Duong indicated that recent share buybacks reflect this competitive phase.
On September 24, Thumzup, a media company linked to Trump Jr. that holds Bitcoin (BTC) and Dogecoin (DOGE), reported an increase in its share buyback from $1 million to $10 million. DeFi Development Corp, associated with Solana (SOL), also boosted its buyback from $1 million to $100 million.
“This trend suggests companies believe only a few dominant players will emerge for each token, driving competition through scale or financial strategies,” Duong opined.
“I believe this approach may have contributed to the price declines seen in mid-to-late September, as these firms focused on enhancing share prices rather than accumulating crypto.”
Some DATs face challenges in sustaining their share prices, with declines of up to 90%, attributed to market saturation and investor anxiety about their longevity.
Share buybacks don’t guarantee success
Duong remarked that his observations suggest share buybacks do not always lead to a price increase, particularly if investors view them negatively regarding a company’s future viability, as the market sentiment profoundly influences these actions.
Related: Crypto treasuries risk 50% downside on PIPE selling pressure
“The impact of buybacks is contingent on investors’ views of a company’s core fundamentals,” he explained.
“For example, if a DAT uses buybacks as a tactical move to lessen its float but investors perceive it lacks effective capital allocation and transparency, then share prices may not benefit. The opposite holds true if conditions align.”
On September 12, TON Strategy Company, previously Verb Technology Company, announced a stock buyback, but the market reacted negatively, with shares falling by 7.5%.
DATs have accumulated substantial holdings
DATs that have integrated Bitcoin into their portfolios hold over 1.4 million coins, constituting about 6.6% of the total supply, valued at over $166 billion.
Additionally, 68 companies have acquired a combined 5.49 million Ether, valued over $24 billion. Meanwhile, Solana has also seen significant interest, with nine publicly tracked entities holding more than 13.4 million tokens, worth over $3 billion.
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