TLDR
- Crypto treasury companies are what’s hot in the TradFi streets right now.
- However, many businesses are attempting to enter the crypto market at the wrong time for the wrong reasons.
- Several of them have already completely failed or are failing.
Crypto treasury companies are having their moment. And we’re happy for them. These publicly traded businesses are pivoting from their original operations to hold major cryptocurrencies like Bitcoin, Dogecoin, or BNB as their primary assets. However, before you jump on this bandwagon as an investor, let’s discuss why these companies might be more smoke than fire.
Recent market movements tell a compelling story. When CleanCore Solutions — a Nebraska-based cleaning equipment manufacturer — announced its $175 million Dogecoin treasury strategy, investors weren’t exactly thrilled. The stock plummeted over 60% in a single day. Meanwhile, Windtree Therapeutics got kicked off the Nasdaq entirely after announcing its BNB treasury plans.
These dramatic reactions should make any investor pause. Are crypto treasury companies legitimate investment opportunities, or are they just desperate businesses using the crypto hype to rescue failing operations? Let’s get after it.
The Treasury Company Playbook
The concept sounds straightforward enough. Instead of holding boring old cash reserves, companies convert their treasury into cryptocurrency. Michael Saylor’s Strategy pioneered this approach with Bitcoin, and the results were initially impressive enough to inspire copycats.
Many of the companies jumping into crypto treasuries aren’t tech innovators or financial pioneers. They’re struggling businesses from completely unrelated industries looking for a lifeline.
CleanCore makes cleaning equipment. Windtree was a biotech company. Bit Origin used to produce pork in China before becoming a Bitcoin miner. These aren’t exactly the crypto-native companies you’d expect to lead a financial revolution.
When Pivots Go Wrong
The pattern is becoming predictable. A struggling company announces a crypto treasury strategy, shares spike briefly on the announcement, then reality sets in. The market quickly realizes that buying crypto doesn’t magically fix underlying business problems.
We’ve figured that out with crypto, right? If the project is bad, social media hype won’t fix its poor fundamentals. Neither will an influencer campaign. Some crypto projects are just bad and can’t be saved. Turns out the same is true with publicly traded companies as well.
Let’s look at the numbers. Spirit Blockchain Capital, which announced Dogecoin yield generation strategies, is down over 88% year-to-date.
Dogecoin Cash Inc. has declined 70% over the same period. Bit Origin’s stock has fallen about 64%.
These aren’t small dips — they’re massive value destructions that have wiped out investor wealth. But when you look at the numbers and the history of these companies, many new investors will find out why they were nothing more than penny stocks to begin with.
The Red Flags
Smart crypto investors know how to spot the warning signs of a desperate pivot. Here are the biggest red flags:
Sudden Industry Changes
When a cleaning equipment company or biotech firm suddenly becomes a cryptocurrency treasury company, that’s not strategic evolution — that’s panic. Legitimate cryptocurrency strategies typically originate from companies with existing financial or technological expertise.
Strategy – Software
SharpLink – Chaired by the Ethereum co-founder
Windtree Therapeutics – Random dudes
See the difference?
Timing Matters
Companies announcing crypto treasury strategies during market peaks or when their core business is failing should raise immediate suspicions. If the pivot coincides with declining revenues or regulatory troubles in their original industry, be extra cautious.
Lack of Crypto Expertise
Look at the leadership team. Do they have experience in cryptocurrency markets, blockchain technology, or digital asset management? Or are they bringing in advisors with crypto connections as window dressing?
Why Some Fail While Others Succeed
Strategy succeeded because Michael Saylor committed to Bitcoin as a long-term strategy, not a quick fix. The company maintained its core business while adding cryptocurrency expertise to its leadership team.
Contrast this with companies that abandon their original operations entirely. When management shifts focus completely away from their core competencies, they often end up excelling at neither their original business nor crypto management.
The successful treasury companies also possess a crucial quality: staying power. They can weather crypto’s notorious volatility without being forced to liquidate holdings at the worst possible times.
What It Means for Your Portfolio
If you’re considering investing in crypto treasury companies, treat them like any other speculative investment. Don’t assume that “publicly traded” automatically means “legitimate” or “safe”.
Research the company’s original business. Is it profitable? Growing? Or are they using crypto as a Hail Mary pass? Check the management team’s track record in both their original industry and cryptocurrency markets.
Most importantly, remember that you can buy crypto directly. If you believe in Dogecoin or BNB, you don’t need to buy shares in a struggling cleaning equipment company to get exposure. Direct crypto ownership gives you better control and often lower fees.
Treasury Company Investments – Buyer Beware
Crypto treasury companies aren’t inherently bad investments, but many of them are poorly disguised attempts to rescue failing businesses with trendy cryptocurrency strategies. The market has been ruthless in punishing these desperate pivots.
Before investing in any crypto treasury company, ask yourself: Would you invest in this company if they weren’t holding cryptocurrency? If the answer is no, then you’re probably better off buying crypto directly or finding a more established company with a proven track record.
Remember, in crypto investing, FOMO can be expensive. The hottest trend isn’t always the smartest investment, and sometimes the most boring approach — like dollar-cost averaging into established cryptocurrencies — beats trying to find the next Strategy.
Stay skeptical, do your research, and never invest more than you can afford to lose. The cryptocurrency world has enough genuine opportunities without chasing companies that are merely using blockchain buzzwords to mask fundamental business issues. Be safe out there, guys.
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