Peter Smith, co-founder and CEO of Blockchain.com, anticipates that the trend of publicly-listed companies adopting digital asset treasury strategies will persist, suggesting that the industry may soon experience a wave of mergers and acquisitions. In an interview, Smith explained that a proliferation of such companies is likely until the supply of management teams or corporate structures runs dry. He notes, “Capitalism is awesome like that,” while revealing that the market will eventually face a slowdown, leading to significant interest in consolidations among the more capable management teams.
Recent developments highlight this trend, particularly with Vivek Ramaswamy’s Bitcoin Digital Asset Treasury (DAT)—Strive—reaching an agreement to acquire Semler Scientific. This merger will create a new entity with a substantial reserve comprising nearly 11,000 BTC, valued at over $1 billion. Benchmark analyst Mark Palmer noted that smaller firms with notable crypto holdings but lower market valuations are likely candidates for such stock-for-stock mergers.
Blockchain.com has been highly active in the digital asset treasury space, with Smith mentioning that the company has allocated over $200 million across a dozen firms, including Bitcoin-focused DAT ProCap Financial, Ethereum treasury BitMine Immersion, and Toncoin DAT Ton Strategy. He explained that these tactics, while historically used by biotech firms, have been revitalized in the crypto sector largely influenced by Michael Saylor’s accumulating strategy at MicroStrategy, which emphasized that accumulating Bitcoin can significantly enhance shareholder value.
The evolution of treasuries has not only embraced Bitcoin but has also expanded to include a variety of cryptocurrencies. The first wave of companies began by accumulating Bitcoin and Ethereum, but the model has since diversified to include altcoins such as XRP, Dogecoin, and BNB. Currently, treasuries holding Bitcoin, Ethereum, or Solana collectively possess over $120 billion in digital assets. This growth has been bolstered by venture capital funding, with DATs raising more than $20 billion this year alone.
However, some experts have expressed concerns about the rapid proliferation of digital asset treasuries. Kadan Stadelmann, CTO at Komoto, described the trend as “self-dealing, dressed up as capital deployment.” Additionally, The Wall Street Journal reported that U.S. regulators are investigating unusual stock trading activity that may have occurred prior to the announcements of public DAT acquisitions, focusing on patterns involving irregular trading volumes and significant stock price increases leading up to the public disclosures.
Smith categorizes digital asset treasuries into two distinct types: those functioning as investment vehicles and those serving as replacements for traditional foundations. In an “investment DAT,” shareholders invest with the expectation that the management team will create more value through innovative financing and favorable access to tokens. However, Smith warns that investing in a DAT could carry more risk compared to directly holding cryptocurrencies. Conversely, “ecosystem DATs” aim to substitute traditional foundations with corporate structures, reflecting a need for regulation that promotes solid governance.
With over a decade of observation into the crypto sector, given Blockchain.com’s founding in 2011, Smith believes digital asset treasuries are positioned for longevity within the financial landscape. The limitations imposed by regulatory frameworks have led to the establishment of foundations in crypto, which he describes as a result of regulatory arbitrage.
In addition to investing in these treasuries, Blockchain.com plays a vital role in the sector by offering various services, including custody, trading, and staking, demonstrating their commitment to supporting digital asset treasuries as a permanent fixture in the financial ecosystem.
