A recent report from Bloomberg has unveiled a striking decline in corporate investment in crypto treasuries, highlighting a significant shift in this new trend that has considerably taken the market by storm throughout the year.
The broader cryptocurrency market has faced additional challenges, with Bitcoin experiencing nearly a 6% decline over the past week, exacerbated by a broader selloff characterized by sudden liquidations.
One of the reasons behind this shift is regulatory scrutiny, with reports indicating that US authorities are now investigating “unusual trading activity” within digital-asset treasury shares ahead of their acquisitions.
The valuations of some treasury firms, which once enjoyed high market premiums, have drastically declined, with their market value approaching the actual Bitcoin they hold.
The current landscape has given rise to a “two-speed market.” On one hand, derivative markets exhibit significant stress, with demand for longer-dated futures collapsing and $275 million worth of Bitcoin longs liquidated in just 24 hours.
Jeff Dorman, chief investment officer at Arca, emphasized that the current weakness in the crypto market is likely a consequence of diminished activity from digital asset treasuries rather than a direct cause of selling pressure. The reduction of these major buyers, he contends, has created a more cautious market environment.
Featured image from DALL-E, chart from TradingView.com
