Coinbase's head of investment research, David Duong, stated that as the market cycle matures, digital asset treasury companies (DAT) may ultimately be consolidated by a few large enterprises to attract investors.
Duong pointed out in an interview with Cointelegraph that, in addition to strategies to boost stock prices, "as the digital asset treasury cycle enters a more mature phase, companies may begin to seek mergers and acquisitions, similar to the recent Strive acquisition of Semler Scientific."
Asset management company Strive, which has transformed into a Bitcoin treasury company, announced on September 22 that it would acquire its peer DAT company Semler Scientific in an all-stock transaction.
Meanwhile, Duong mentioned that digital asset treasuries (DAT) are also exploring more native crypto strategies, such as earning yields through staking or DeFi looping, where DeFi looping refers to repeatedly borrowing and reallocating the same asset to amplify returns.
On September 15, Standard Chartered Bank predicted that not all digital asset companies would survive in the long term, which could force them to adopt new strategies or eventually fade out of the market.
Duong and Coinbase researcher Colin Basco stated in a report on September 10 that competition among digital asset companies has entered a player-vs-player stage, with companies vying to stand out.
Duong noted that in recent weeks, the stock buyback activities of cryptocurrency treasury companies are a result of this new phase.
Media company Thumzup, associated with Trump and holding Bitcoin (BTC) and Dogecoin (DOGE), announced on September 24 that it would increase its stock buyback scale from $1 million to $10 million. Solana (SOL) treasury company DeFi Development Corp also expanded its stock buyback scale from $1 million to $100 million.
Duong stated, "I believe the origin of this idea is that companies generally think that each token will ultimately be dominated by a few major players, so they are competing through scale or financial means to highlight their differentiation."
Some digital asset companies have struggled to maintain their stock prices, with some even losing up to 90% of their market value, attributed to market saturation and investor concerns about sustainability.
Duong also mentioned that in his experience, stock buybacks do not always lead to an increase in stock prices, especially when the market views such moves as a negative signal regarding the company's long-term health, as stock prices are ultimately "largely driven by sentiment."
"The effectiveness of buybacks depends on investors' perception of the company's fundamentals," he added.
TON Strategy Company (formerly Verb Technology Company) announced a stock buyback plan on September 12, but investor response was lukewarm, leading to a 7.5% drop in stock price.
Those DATs that have incorporated Bitcoin into their balance sheets hold a total of over 1.4 million Bitcoins, accounting for approximately 6.6% of the total supply, with a market value exceeding $166 billion.
Meanwhile, 68 companies collectively hold 5.49 million Ethereum, with a total value exceeding $24 billion. Solana has also seen significant holdings, with nine publicly tracked institutions holding over 13.4 million tokens, totaling over $3 billion in value.
Related: Trump nominates current FDIC acting chair to officially lead the agency
Original article: “Coinbase: Cryptocurrency Treasuries May Spark a Wave of Mergers and Acquisitions”
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