Galaxy Digital's CEO Mike Novogratz says Bitcoin treasury company issuance has likely peaked.

Galaxy Digital's CEO Mike Novogratz says Bitcoin treasury company issuance has likely peaked.

Galaxy Digital's CEO Mike Novogratz has indicated that the surge in companies created to hold cryptocurrencies on their balance sheets has likely reached its peak. During the company's second-quarter earnings call, Novogratz stated, "We’ve probably gone through peak treasury company issuance" [1].

The market for Bitcoin treasury companies has seen a significant increase in recent months, driven by a more favorable regulatory environment in the United States. However, Novogratz cautioned that new market entrants may face challenges in gaining traction. He highlighted that established companies like Tom Lee’s BitMine and Joe Lubin’s SharpLink, which hold significant amounts of Ethereum, are likely to continue growing [1].

Galaxy Digital, which works with over 20 crypto treasury investment firms, has seen its platform grow by approximately $2 billion in assets, generating recurring income through management fees [1]. This growth is a testament to the increasing interest and investment in cryptocurrencies by institutional investors.

Meanwhile, Metaplanet, a Tokyo-listed Bitcoin treasury firm, has filed a shelf registration to issue up to 555 billion Japanese yen ($3.7 billion) worth of shares to fund its Bitcoin accumulation strategy. The proposed raise is about 75% of the company's current market capitalization and aims to bolster its target of accumulating 210,000 BTC by 2027 [2].

The trend of companies investing in Bitcoin as a treasury asset is also reflected in the recent move by Robin Energy, which allocated $3 million into Bitcoin using Anchorage Digital Bank as a custodian. This marks a growing trend among corporations adopting Bitcoin as a treasury asset [4].

Despite the potential growth and interest, Novogratz warned that new companies may struggle to compete with established players. The current market conditions, characterized by elevated demand and supply, have been favorable for crypto prices, but the sustainability of this trend remains to be seen.

References:
[1] https://finance.yahoo.com/news/bitcoin-treasury-companies-peaked-says-174140657.html
[2] https://www.theblock.co/post/365210/japans-metaplanet-3-7-billion-raise
[4] https://en.coinotag.com/robin-energy-invests-3-million-in-bitcoin-through-anchorage-digital-bank-signaling-potential-shift-in-corporate-treasury-strategies/