Crypto Treasury Growth Has Likely Peaked

The crypto treasury movement may be entering a new phase. According to Galaxy Digital CEO Michael Novogratz, growth has likely peaked.

Speaking during Galaxy’s Q2 earnings call, Novogratz said, “We’ve probably gone through peak treasury company issuance.”

That doesn’t mean the model is dead. In fact, Novogratz expects current leaders to gain momentum, but newcomers may face challenges.

Ethereum Has Early Leaders in Crypto Treasury

Novogratz pointed to Ethereum as a key battleground. He named BitMine and SharpLink as dominant crypto treasury holders.

Both companies have made headlines in recent months. Tom Lee’s BitMine and Joe Lubin’s SharpLink raised large sums to buy ETH.

These early movers now have an edge. Novogratz noted, “The question now is which of the existing companies become monsters.”

Why New Entrants May Struggle for Oxygen

New firms jumping into the crypto treasury space could face headwinds. The early capital inflow phase may be over.

Regulatory clarity has helped some companies grow fast. But saturation, competition, and rising asset prices now raise the bar.

With fewer cheap tokens available and rising investor expectations, new entrants need sharp strategies and deep pockets.

Galaxy’s Bet on Treasury Management Pays Off

Galaxy Digital isn’t issuing crypto treasury shares itself. Instead, it manages funds for others doing just that.

The company now partners with more than 20 crypto treasury firms. These partnerships have added $2 billion in assets under management.

Management fees from these holdings are creating “recurring income that will go on and on,” Novogratz emphasized.

The Business Model of Crypto Treasury Firms

Crypto treasury companies raise funds through public markets. They then buy and hold major cryptocurrencies like Bitcoin and Ethereum.

This model became popular in 2024 after new U.S. crypto regulations passed. Investors saw it as a pure-play on crypto asset growth.

Now that many companies have gone public, the focus shifts to performance. Investors will watch how well these firms deploy capital.

Regulatory Clarity Fueled the First Wave

The GENIUS Act and related reforms provided much-needed clarity. This regulatory shift unlocked a surge in crypto treasury creation.

Dozens of companies took advantage of the timing. They positioned themselves as digital-native balance sheets with strong upside.

But the floodgates may now be closing. Regulatory certainty may no longer be enough to support new crypto treasury launches.

Future Winners Will Be Operationally Strong

To succeed long-term, crypto treasury firms must be more than just token holders. Execution, security, and smart yield strategies matter.

Galaxy’s view is that the sector will consolidate. Leaders like BitMine and SharpLink may absorb others or expand rapidly.

The era of easy growth is fading. But for firms that survive this phase, the upside remains enormous.

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