The story of the Crypto Treasury, which has become a major characteristic of the current market cycle, is parallel to the feeling of investors in the Dotcom era of the late 1990s and the early 2000s, which made the stock market flow by around 80%, according to Ray Youssef, founder of the PER-TO-PEER loan platform application.
The same too zealous psychology of investors who led to an over-investment in the first Internet and Technological Companies During the Dotcom crash has not disappeared due to the presence of Crypto financial institutions, told Cointelegraph. He said:
“Dotcoms were an innovative phenomenon of the emerging computer market, alongside large companies with serious ideas and long -term strategies, the race for capital investment has also attracted amateurs, opportunists and dreamers, because daring and futuristic visions of the future are easy to sell on the mass market.
Today, the global financial market is motivated by the idea of cryptocurrency, decentralized finance and the Web3 revolution, “he added.
He predicted that a majority of Cryptographic cash companies would emerge and be forced to unload their assets, creating the conditions for the next crypto bears market, but that a Select some survive And continue to accumulate crypto to a significant discount.
Crypto cash companies dominated the headlines during the current market cycle, because institutional investment is presented as a sign that the crypto has matured a niche phenomenon to a class of world assets Courted by the nation states and societies.
In relation: Cryptographic markets are decreasing, but corporate proxies are worse
All cryptographic cash companies are not condemned; Responsible management can reduce slowdowns
Cryptographic cash companies can mitigate the effects of market slowdown and even prosper if the responsible treasury and risk management are practiced.
The reduction in the burden of the debt of a company considerably reduces the chances of bankruptcy, and the companies which emit new equity, as opposed to the debt of companies, have a greater chance of surviving a slowdown because the holders of actions do not have the same legal rights as the creditors.
If a company chooses to take debts to finance cryptography purchases, reduce debt or space when each debt bracket must be reimbursed, is essential.
For example, if a company knows Bitcoin (BTC) Tends to operate in four -year cycles, it can structure its upcoming debt in five years to avoid having to reimburse loans when the cryptography prices are depressed.
Companies should also Invest in cryptocurrencies wearing by the offer or first -rate digital assets that are perennial and recover between cycles, as opposed to altcoins which can lose up to 90% of their value between market cycles and sometimes never recover.
Finally, companies with generation of operating activities are in a better position than pure cash parts which do not have sources of income to channel the purchases of crypto and operate as acquisition vehicles listed on the stock market which depend on the financing.
Review: How Ethereum Treasury Companies could trigger “Defi Summer 2.0”
