Adding underperforming altcoins to the balance sheet is confusing the broader treasury narrative, said David Bailey, CEO of Bitcoin treasury company Nakamoto.
"The term treasury company itself is confusing," Bailey said in a post on X on Sunday.
"Toxic financing, failed altcoins repackaged as DAT (Digital Asset Treasury), too many failed companies without plans or vision. This completely disrupts the narrative," Bailey said.
Bailey emphasized that "the core strategy is to build and profit from your balance sheet."
"If you do well, your assets will grow over time; if you do poorly, you will trade at a discount and be acquired by those who can do better," he said.
"Bitcoin treasury companies in the fiat system are banks. Today we are building Bitcoin banks. If you are afraid of this term, just call them Bitcoin financial institutions."
Bailey stated that the entire treasury industry is undergoing a "test." His comments come as publicly listed companies begin to look beyond Bitcoin (BTC) along the risk curve to find other crypto assets to add to their treasuries.
On August 2, it was reported that Nasdaq-listed Mill City Ventures III may raise an additional $500 million under an equity agreement to fund its recently announced Sui treasury strategy.
Galaxy Digital stated in a report on July 31 that narrative-driven arguments are prompting companies to expand their treasuries beyond Bitcoin. Cryptocurrencies like Ethereum (ETH), Solana (SOL), Ripple (XRP), Binance Coin (BNB), and HyperLiquid (HYPE) are gaining attention outside of Bitcoin.
According to data from BitcoinTreasuries.NET, as of the time of writing, publicly traded companies hold approximately $117.91 billion in Bitcoin.
Ethereum is gaining attention as an alternative option because it can also be staked for annual yields, making it both a store of value and a source of income. According to StrategicETHReserve data, about 3.14% of the total supply of Ethereum is held by publicly listed treasury companies.
Mike Novogratz, CEO of Galaxy Digital, stated that the interest of treasury companies in the broader crypto market may be a reason for Bitcoin's recent sideways price movement.
"Bitcoin is currently in a consolidation phase. Part of the reason is that you see many of these treasury companies trying opportunities in other coins," Novogratz said.
While altcoins in treasuries face some scrutiny, Bitcoin treasuries also raise questions.
Venture capital firm Breed stated that only a few Bitcoin treasury companies can withstand the test of time and avoid the vicious "death spiral" that affects BTC-holding companies close to net asset value (NAV) trading.
Related: Novogratz: Bitcoin (BTC) is in a consolidation phase, corporate funds are shifting to altcoins
Original article: “David Bailey: ‘Underperforming Altcoins’ Are Confusing the Treasury Narrative”
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