Crypto Treasury, which has become a major feature of the current market tour, is parallel to the Dotcom era in the late 1990s and early the first decade of the twentieth century, which caused the arrow market to be drowned by 80 %, according to Ray Yousef, the founder of the peer lending platform.
Youssef told Cointelegraph, that the same psychology of the excessive investor in the field of self that led to excessive investment in Internet and early technology companies during the Dotcom incident did not disappear due to the presence of financial institutions in Crypto. He said:
“Dotcoms has been an innovative phenomenon in the emerging information technology market, along with the major companies that have serious ideas and long -term strategies, attracting enthusiastic, opportunistic investment capital and rulers, because bold and future visions of the future are easy to sell to the collective market.
Today, the global financial market is driven by the idea of cryptocurrency, decentralized financing and web 3.
He expected that the majority of the treasury companies will disappear and be forced to empty their property, which creates the conditions for the next bear encryption market, but a selected few would survive and continue to accumulate encryption with a great discount.
Crypto Treasury companies took control of the main headlines during the current market cycle, where institutional investment is described as a sign that Crypto has matured from a specialized phenomenon to a global category of assets governed by national countries and companies.
Related to: The encryption markets are broken, but corporate agents are practicing much worse
Not all encrypted treasury companies are convicted; The responsible administration can mitigate
Crypto Treasury companies can reduce the effects of the market shrinkage and even thrive if the responsible treasury is practiced and risk management.
Reducing the debt burden of the company greatly reduces bankruptcy opportunities, and companies that issue new royal rights, unlike corporate debts, have a greater opportunity to survive because shareholders do not have the same legal rights as creditors.
If the company chooses to take debts to finance encryption purchases, debt description, or spacing when each debt slice must be paid, it is very important.
For example, if a company knows that Bitcoin (BTC) tends to work in four -year courses, it can organize its debts within five years to avoid having to pay loans when the coding prices are depressed.
Companies must also invest in encrypted currencies covered with width or digital assets with blue chip that are permanent and recovering between courses, unlike Altcoins that can lose up to 90 % of their value between market courses and sometimes they never recover.
Finally, companies that have revenue to generate operational business in a better position of pure treasury plays that do not have revenue flows to convert them into encryption purchases and are working as the audience -circulating acquisition of financing vehicles.
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The post Crypto Treasury Narrative Bears Striking Similarly to Dotcom-Era Thinking first appeared on Investorempires.com.
