“Has the DAT bubble burst yet? Digital Treasuries ( DAT ) have been growing rapidly in recent months. Following Bitcoin Treasuries (BTC) companies like Strategy , which are hoarding the cryptocurrency king, other companies have decided to focus on various altcoins . But with the recent sudden crash in the cryptocurrency market, some decisions turned out to be unwise. Is this trend a “bubble.” […]”, — write: businessua.com.ua
Has the DAT bubble burst yet? Digital Treasury Bonds ( DAT ) have been growing rapidly in recent months. Following by Bitcoin Treasuries (BTC) companies such as Strategy which accumulate the king of cryptocurrencies, other companies decided to focus on different altcoins . But with a recent one sudden collapse in the cryptocurrency market, some decisions turned out to be unreasonable. Is this trend ” bubble “, which just popped ?
Key points of this article:
- Digital asset management companies (DAT), have been booming, but the recent sudden crash has highlighted some bad decisions.
- Tom Lee, president of BitMine, suggested that the DAT bubble may have already burst, with many companies trading shares below their asset value.
In a recent interview with Fortune magazine Thomas “ Tom” Lee experienced analyst and president BitMine one of the largest digital treasuries focused on Ethereum (ETH), stated that bubble for this DAT trend maybe already flaked .
According to him, many cryptocurrency treasury companies such as Metaplanet, are currently trading below their net asset value . This is a classic indicator of a bubble is about to peel off .
And as Fortune reports, Tom Lee is no stranger to this industry. He discovered bitcoin in 2012 when he was the chief strategist in JPMorgan . Then he founded his own company Fundstrat . And last June he joined to BitMine a publicly traded bitcoin mining company that decided this year accumulate ether to become the largest institutional owner of Ethereum.
Diversifying into cryptocurrencies can be risky in some cases The prevalence of these DATs, especially those dependent on highly volatile cryptocurrencies such as the Dogecoin memcoin (DOGE) maybe a sign of overheating for Tom Lee, and he wonders:
“If it’s not already a bubble that’s popping, how can it pop?”
As more and more such companies trade below the value of their underlying assets, especially after sudden collapse on Friday, October 10 we see that the market no longer believes in their potential . And this situation is strangely reminiscent the 2017/2018 ICO (Initial Coin Offering) bubble when projects that sometimes had no real value raised millions of dollars before collapsing .
Therefore, is DAT out of vogue? ? At this stage, it is still difficult to say for sure. But we can definitely say that only companies with the most reliable crypto-treasury projects will survive bubble popping like Ethereum’s BitMine or Bitcoin’s Strategy. As for the spread of less reliable altcoin accumulation projects, their chances of surviving a bursting bubble are as slim as the walls of that same bubble. Investors in digital treasury bonds are therefore recommended be careful .
Source: journalducoin.com
Please wait…