Understanding Crypto Treasury Companies: Risks and Rewards
Investors should be aware of the risks and benefits of crypto treasury companies, which accumulate and hold cryptocurrencies as a primary strategy. These companies can be compared to leveraged bets on the underlying coins, with added risks from governance and regulatory issues. Long-term investors should keep position sizes conservative and reflect the added stock-specific risks on top of crypto volatility.
Crypto treasury companies (DATCOs) have emerged as a significant force in institutional crypto adoption, leveraging innovative capital structures to accumulate cryptocurrencies. These firms, often referred to as Digital Asset Treasury Companies (DATCOs), employ strategies such as issuing convertible notes, preferred shares, and…
