SkyBridge Capital Founder Questions Sustainability of Crypto Treasury Strategies

Anthony Scaramucci, the founder and managing partner of SkyBridge Capital, has expressed skepticism about the sustainability of the current trend where public companies are adopting crypto treasury strategies. He believes that this trend will eventually fade, as investors may question the logic of paying a premium for equity in firms that hold crypto assets when they could directly purchase the underlying assets themselves.

Several companies have followed the model set by Strategy, which involves using corporate balance sheets to hold Bitcoin or other tokens. For instance, BitMine Immersion Technologies recently announced a $250 million placement to support an Ethereum treasury and appointed Fundstrat founder Thomas Lee as board chair. Other firms have also added high-profile advisers to enhance their visibility, such as Eric Trump on the board of Metaplanet and Joe Lubin chairing SharpLink Gaming, which has shifted its focus to Ethereum holdings.

Scaramucci acknowledges that Strategy's case is unique due to its diverse product offerings. While he remains bullish on Bitcoin in the long term, he advises investors to carefully evaluate each firm's structure and cost profile. He cautions that the underlying costs associated with these treasury companies could impact their performance, suggesting that investors might be better off directly investing in Bitcoin.

The funding model for Strategy’s purchases has evolved over time, transitioning from stock and debt issuance to preferred share sales. This approach has drawn criticism, including from short-seller Jim Chanos, who described it as “financial gibberish.” Scaramucci raises a practical question for investors: if a company is putting $8 into Bitcoin for every $10 invested, would it perform better than directly investing $10 into Bitcoin? He suggests that the added costs and complexities might not justify the indirect exposure to crypto assets.

Critics argue that firms structured around token holdings may blur the line between operating businesses and passive investment vehicles. This could complicate shareholder expectations and disclosures, potentially leading to regulatory scrutiny. Oversight bodies may revisit listing rules, disclosure practices, and capital allocation policies, which could reshape how corporate crypto strategies are designed or whether they remain viable.

Some investors prefer regulated equity exposure for accessibility or tax reasons, while others rely on company governance or believe in additional business value. However, critics contend that the added cost may not justify the indirect exposure to crypto assets. Current U.S. accounting rules treat crypto as indefinite-lived intangible assets, requiring companies to record impairment losses if prices fall but not allowing them to mark up assets if values rise. This could distort reported financials and influence how strategies are structured.

Corporate crypto gains are taxed under capital gains rules, and transaction-based holdings may trigger complex reporting requirements. Jurisdictional rules vary and can influence how these strategies are structured. As the trend of corporate crypto treasuries continues to evolve, investors and regulators alike will need to navigate these complexities to ensure sustainable and transparent practices.