The CEO of one of the biggest Bitcoin mining companies in the world says that the market for turning companies into BTC treasuries is probably getting saturated.
In a new interview with Bloomberg Television, Marathon Digital CEO Fred Thiel says that a slowdown is approaching for the Bitcoin treasury business model as the market becomes too crowded and competitive.
“The problem is what happens if the Bitcoin price stays flat or starts to go down? You said his stock was up over a five-year basis by a huge amount, which is true, but if you look at year-to-date at its performance compared to Bitcoin miners, you’re starting to see that that performance is running into headwinds.
In theory, a Bitcoin treasury company’s price should increase by upwards of two times whatever the Bitcoin price is increasing on a daily basis because of the leverage that they’re driving. And that’s not the case anymore.
I think what we’re starting to see is a saturation of the Bitcoin treasury business market because to your point, they’re not in any other business, they’re taking over a company with a marginally profitable business and they’re turning it into an accumulator for Bitcoin. At the end of the day, you have a bunch of people competing for capital, and that capital is going to the highest return, which means the lowest multiple to NAV (net asset value), and over time, that multiple to NAV is eventually going to go to zero…”
Some of the recently launched BTC treasuries include Anthony Pompliano’s ProCap BTC, Grant Cardone’s Cardone Capital, Gamestop and Japanese hotel company MetaPlanet.
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