What you need to know
Guy Young, Ethena CEO, has praised crypto treasuries for being the answer to VC supply shortages and a driver of growth in revenue-generating projects. But risk still remains.
Ethena [ENA] Guy Young of Labs has defended cryptocurrency treasuries for being the best solution to the infamous Venture Capital Token Unlockings and Dumping in the Space.
Young acknowledged that ENA was also facing the problem of VC selt-offs due to the limited liquidity of the crypto sector.
Young says that traditional markets may be able to help relieve the oversupply. noted.
“You wanted a solution to the overhang of VC unlocks? Well, this is it (crypto treasuries).”
Source: X
Crypto treasuries, a risk or solution?
When early investors exit, they sell off their shares on the retail markets to recover their original investment.
In most cases the oversupply from VCs will always drive the retail price down, resulting in losses.
The selling gets worse when there is a general negative mood in the market.
As an example: Celestia [TIA] Price plunges over 90% as Polychain VC consistently increases its price dumping Staking rewards and unlocks are worth millions. A new firm is now looking to acquire Polychain’s TIA.
The dump on retail became so infamous that Crypto Twitter (CT) community dubbed VC-backed projects as ‘VC tokens,’ shunned them, and pivoted to memecoins, birthing the ‘memecoin supercycle’ trend seen from 2024.
Actual revenue (vs. “vapourware”
However, Young acknowledged that most altcoins are ‘shitcoins’ and ‘vapourware’, and offering them via an ETF (exchange-traded fund) won’t change anything.
In contrast, Young said TradFi is happy to support crypto-projects with revenues like Ethena.
“But I do think this is an incredibly bullish development for a small handful of tokens where TradFi can underwrite a real business model benefiting from secular growth trends.”
Plusieurs legacy companies have adopted a digital strategy by 2025 crypto treasuries And beyond Bitcoin [BTC] The following are some examples of how to get started: Ethereum [ETH].
The windfall of Strategy’s Bet on BTC wins (formerly MicroStrategy).
Results? Stocks of these firms are up more than their underlying crypto assets. It has been more of a crypto-treasury than a season for altcoins.
It’s not just about price depreciation.
Bullish… with a warning label
Criticism has been criticized by many. warned The excessive leverage used by the Treasury firms to purchase more BTC or altcoins can pose a risk of liquidation to TradFi and the entire industry if the firms go bankrupt.
Source: X
Strategy, with a debt burden of more than $8B, is by far the biggest. Metaplanet The debt is only $116 million.
Alex Thorn is the CEO of Galaxy Research downplayed the debt concerns as ‘overblown’, stating that most will begin to mature by 2028.
In general, crypto-treasuries provided enough liquidity to the market in order to prevent further declines. Their debt leverage is still a concern.
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Source: ambcrypto.com
