A new report from Coinbase reveals the evolving landscape of companies purchasing cryptocurrencies, suggesting a shift towards intense competition for investor capital. According to the firm’s head of research, David Duong, and researcher Colin Basco, the current stage resembles a “player versus player” dynamic. They emphasize that the era of easy profits and guaranteed mNAV (multiple of Net Asset Value) premiums has ended.
The report outlines that these digital asset treasuries (DATs) are now competing strategically, and firms that can position themselves effectively will thrive. This competitive environment is anticipated to channel unprecedented capital into the crypto market, potentially driving prices upward.
However, there is rising concern among analysts regarding the saturated market for crypto-buying firms. NYDIG recently highlighted a troubling trend where many companies in this sector witnessed valuation drops, even amid Bitcoin’s price rises.
Duong and Basco describe a pivotal moment for crypto treasuries, indicating that early movers, such as firms with significant Bitcoin holdings, initially thrived with substantial premiums. Yet, they caution that increasing competition, execution challenges, and regulatory issues have resulted in a compression of mNAV. The scarcity premium that once favored early adopters is disappearing, marking a critical inflection point for crypto treasuries.
At this juncture, the researchers argue that a treasury company’s future success will increasingly rely on execution, differentiation, and the timing of market moves, rather than merely imitating strategies from established players like MicroStrategy.
Furthermore, they address the so-called “September effect”—a historical trend where Bitcoin has seen declines in September—which investors have often considered in their trading strategies. However, Duong and Basco suggest that this phenomenon is not a reliable indicator for future BTC performance. Referring to the past few years, they point out that trading based on the assumption of September being a bad month for Bitcoin would have led to losses in 2023 and 2024. They conclude that month-to-month seasonality lacks statistical predictability for Bitcoin’s monthly returns.
Looking forward, the researchers maintain an optimistic outlook for the crypto market as they expect the Federal Reserve to initiate rate cuts during their upcoming meetings. This could create favorable conditions for crypto and other risk assets, as historically, such cuts have stimulated market activity. With inflation on the rise, currently pinpointed at 2.9% compared to the previous year, Bitcoin and other cryptocurrencies may continue to outperform in this supportive macroeconomic setting.
As the market prepares for potential rate cuts by 25 basis points in the near future, Coinbase remains positive about the prospects for the crypto landscape. They foresee continued support from liquidity, an encouraging regulatory environment, and an overall positive economic backdrop heading into the fourth quarter.
