The digital asset market isSaylorization” Ministry of Business Finance.
This term refers to The trends they employ from many companies to follow Michael Saylor’s model.recognized Strategy (formerly MicroStrategy) CEO and Bitcoiner Maximalist. He was the one who promoted an aggressive accumulation strategy for Bitcoin (BTC) as a reserve asset, and was able to fund the money by issuing convertible bonds and expand his holdings without relying on the company’s operating income.
From 2020 to today, Saylor has implemented a BTC continuous purchasing process, and currently the strategy is the one that has the most Bitcoin in the Treasury of people cited in the stock market at 580,955 BTC.
What began as a bold or dangerous play a few years ago is one of the trends that today mark the pulse of the market. However, the strategy has evolved. Companies are expanding their focus beyond BTC.
As reported by Cryptootics, Vivopower and Webus companies have announced their intention to establish a Treasury Department at XRP for $100 million and $300 million, respectively. Sharplink then informed the creation of the Ministry of Finance for Ether (ETH), the native cryptocurrency of Ethereum. Other companies such as Development Corp (formerly Janover), Classover Holdings, Sol Strategies and Upexi have chosen to replace the reserve BTC with Solana (Sun).
In its latest report, Galaxy Research is cited in the stock market and focuses on 28 companies that maintain the treasures of BTC and cryptocurrency. According to the list, the 20 bookings focus on BTC and BTC.
Galaxy analysts call this phenomenon a “treasure trend,” and “it is expected that financial strategies with digital assets will continue to give existing companies the impulses and the apparently strong appetite of the market to raise capital on important amounts and multiple assets.” However, in order to counter so many optimism, they add:
“As more cryptocurrency financing companies go up and running, skepticism continues to grow. The main concern lies in the source of funding that drives some of the purchases: debt.”
Galaxy Research, investment company.
risk
Experts say that the main risks for some companies are They fund the purchase of debt assets, particularly through convertible zero coupon bonds.. These financial instruments can become actions if the price of the action exceeds the conversion price at the expiration date. Otherwise, the company must pay the capital in cash. This can be a problem if there is no liquidity.
Given this scenario, the finance company has four options to avoid more problems.
The first is to sell BTC and cryptocurrency reserves and get the money you need to face obligations. The problem is that these moves can create bearish pressure on the price of the asset in question. This not only affects the company that decides to sell, But it can create a domino effect by hurting other companies that also have the same assets in their Treasury Departmentwhich adversely affects the growing trend of accumulating BTC and other cryptocurrencies as value reserves.
The second answer is that these companies narrow down their debts. It is a common strategy in the financial world, but it depends on the market situation. This is because new funds can be difficult to achieve if the terms are at a disadvantage or if trust in the company fades, or you can earn them at a higher interest rate, increasing the cost of future liabilities and financial risk.
The third method is to issue new actions to raise funds and pay the obligation. This is known as capital funding. It does not generate any debt or interest, but costs are incurred as it dilutes current shareholder participation due to an increase in the amount of action in circulation.
And the same thing happens here. Its viability also depends on the market’s trust and investor desire to buy new stocks.
The fourth answer is to enter a default if the value of the booking does not cover the obligation, i.e. if you are unable to comply with your payment obligation. in this case, The company is forced to enter defaults.
This can occur when the value of a digital asset within a balance is significantly reduced and is not sufficient to cover the total liability. In addition to losing trust, there is a risk that creditors will start legal action to restore some of their holdings.
After revealing these four alternatives, experts add: “The path each company adopts in its worst case scenario depends on the specific situation and market conditions at the time of expiration date. For example, a finance company can only refinance if market conditions are permitted.”
However, in the case of galaxies, There are no “immediate threats” at the moment. They said, “While the concerns about cryptocurrency financing companies’ debt strategies are reasonable given the close history of the industry, we have not observed any significant risks that can be achieved from this approach at this time.”
The amount of the company’s liability is then observed at the minimum expiration date used to purchase BTC from 2024 to 2030. The red line indicates the current date for May 2025. The pico on the graph represents the moment when he used a large amount of debt to buy BTC, such as $3.65 billion in June 2028 and $2,000 million in March 2029.Called“They show the date the call option was executed. This suggests Increased use of corporate debt for investment in BTCthere is a big trend towards the future.
Now, another risk that appears on the horizon is likely as debt expires and more companies adopt the strategy. Do this with the most dangerous approach, or issue more debt at a more severe maturity. “In the worst case scenario, these companies have a variety of traditional financing options to find an outlet that may not lead to the sale of their financial assets,” says Galaxy.
Altcoin debt and risk
Although not mentioned in the report, this strategy presents a different risk. Instead of BTC, it forms a strategic Altcoins reserve.
Digital assets are considered risky assets and tend to lose their appeal if they are not accompanied by a macroeconomic context. Whenever this happens, financial speculators choose to place their holdings on safer assets, such as treasured bonds.
However, BTC shows a prominent recovery ability to these tensions. Unlike cryptocurrencies, currency created by Nakamoto At It stands out with its absolute digital shortage, its decentralization, and global consensus that gives you legitimacy.
Similarly, you need to emphasize the condition that you are the first truly rare digital asset. This allowed us to integrate the solid foundation of users, strong reputation, and dominant position as references within the ecosystem. These qualities position it as a unique and reliable value reserve for the long term.
Finally, we must not omit that cryptocurrencies rely on devices and the companies that manage them. This means additional risks regarding centralized decision-making or governance issues. Meanwhile, Bitcoin Network is open without ownership and without resistance to censorship, enhancing its reliability and time value.
(tagstotranslate)altcoins
