Crypto Treasury Companies Can Achieve Success in the Long Term

Ryan Watkins: Crypto Treasury Companies Hold $105 Billion in Monthly Assets

Ryan Watkins, co-founder of Syncracy Capital, states that Digital Asset Treasury (DAT) companies currently hold $105 billion worth of crypto assets. Watkins argues that these companies could evolve into long-term ecosystem players over time.

DATs' Potential Could Be Like Berkshire Hathaway

Watkins stated that successful DAT companies could use their assets to build businesses, fund growth, and even influence governance. He compared this potential to giants like Berkshire Hathaway. However, he emphasized that only well-managed DATs would transcend today's speculative era.

DATs are publicly traded companies that raise capital to manage crypto assets. Watkins believes that many market participants do not sufficiently consider the opportunities offered by such companies.

Trading Dynamics and Long-Term Focused Approaches

Watkins said that most investors focus on short-term trading dynamics, leading them to concentrate on premiums to net asset value, fundraising announcements, and "what's the next token." However, this approach misses the bigger picture. In this context, the purposes of DATs can be broader compared to crypto foundations.

Since some DATs control significant portions of the token supply, treasury funds cannot merely remain as vaults; they can also become influential tools for policy and product within ecosystems.

Programmable Assets and Productive Balance Sheets

Watkins compared MicroStrategy’s Bitcoin-only market entry strategy. He stated that tokens on programmable smart contract platforms, with the potential to create value in the ecosystem, could be utilized.

DATs that own digital assets can play specific roles, providing liquidity, having a say in governance, and acquiring fundamental elements of the crypto ecosystem. This makes their balance sheet structures a model for increasing efficiency.

Risks and Potential Successes

Watkins warned, "Not all DATs will succeed." He noted that the first generation of vehicles might be strong in financial engineering but weak in operational experience. In this increasingly competitive environment, he predicted that some DATs could disappear, and more experimental financing methods or unbalanced balance sheet movements might become prevalent within the ecosystem.

Consequently, he believes that the successful ones will be DATs that combine disciplined capital management with operational capabilities. He added, "The best-managed ones could, over time, become the Berkshire Hathaways of their respective blockchains."