An uptick in traditional firms investing in digital assets signals a potential shift in corporate treasury strategy.

A growing number of traditional companies are exploring digital assets as part of their corporate treasury strategies. This trend suggests a changing perspective on the role of cryptocurrencies in business financial management.

Recent Company Moves

This week, firms across diverse sectors announced allocations to leading digital assets.

  • Wednesday: Nature’s Miracle (Agricultural Technology) allocated up to $20 million for an XRP treasury.
  • Wednesday: Upexi (Consumer Manufacturing) acquired 83,000 SOL (worth $16.7 million) for its treasury.
  • Tuesday: Kitabo (Publicly listed Japanese textiles/recycling firm) planned acquiring approximately $5.6 million worth of Bitcoin.
Bitcoin Treasury Firms
The Top 100 publicly listed Bitcoin treasury firms. Source: BitcoinTreasuries

The rise of Bitcoin and altcoin treasury companies expands corporate treasury options. However, analysts highlight escalating market and investment risks as adoption grows.

Related: Trump’s Bitcoin mentor bet on BTC treasury strategies — and his wealth is exploding

Mounting Risks to Crypto Treasuries

Investing in digital assets introduces significant legal and market risks, warns analysts.

According to a June report by venture capital firm Breed, only a handful of Bitcoin treasury companies are expected to survive.

The report suggests that even small drops in Bitcoin’s price could trigger a debt spiral among heavily leveraged firms. Reliance on selling assets to cover obligations could cause a downward price cycle, potentially leading to corporate credit drying up.

Crypto Treasury Death Spiral
Crypto treasury company death spiral. Source: Breed

Legal challenges could arise if digital assets underperform. Furthermore, altcoin holdings face additional uncertainty due to potential price volatility and the risk of extreme drawdowns during bear markets.

As quoted on social media: “Altcoins have no floor and thus are cooked once ‘the music stops,’ whereas the BTC treasury companies have a floor, and this floor is independent of them, and it tends to go up with time,” commented a community member online.

Magazine: ‘China’s MicroStrategy’ Meitu sells all its Bitcoin and Ethereum: Asia Express