The crisis of the Bitcoin Treasury Department model, and Novogratz's survival strategy

Galaxy Digital CEO Mike Novogratz recently pointed out the structural issues of the cryptocurrency Treasury in a podcast. His proposed solution goes beyond the limitations of the traditional asset accumulation model.

Decline of the Treasury Rappers: What’s the Reason?

Mike Novogratz analyzed that the Bitcoin and Ethereum Treasuries are facing serious structural crises. The cause is the emergence of spot ETFs. As ETFs provide direct exposure to cryptocurrencies, the existence of Treasury Rappers has been significantly diminished.

Shareholders’ Dilemma: Losses and Opportunity Costs

Going into more detail, the situation is even more severe. About 40% of Bitcoin Treasuries are trading below their net asset value, and over two-thirds of the holdings were purchased at prices higher than the average purchase price, Novogratz revealed. This indicates that investors are delaying realizing losses.

How to Survive: Mike Novogratz’s Proposal

Novogratz offered specific survival strategies for struggling treasuries. First, he advises actively repurchasing discounted shares to restore shareholder value. At the same time, they should utilize their assets to develop new business models like neo-banks.

This means shifting from simple cryptocurrency holdings to operating companies that provide tangible financial services and products. Novogratz emphasized that creating shareholder value cannot be achieved solely through accumulating crypto assets.

Signal of Industry Transition

Mike Novogratz’s remarks reflect a broad shift in the cryptocurrency industry toward moving beyond mere asset management to building profitable business models. Restructuring the treasury framework has become an unavoidable challenge, and developing innovative services is now a critical condition for survival.