Bitcoin Treasury Mania Faces Memecoin-Style Reckoning – VC Warns of Impending Bubble Burst

Crypto''s latest corporate darling – Bitcoin treasuries – might be heading for a spectacular crash. Venture capitalists are drawing uncomfortable parallels with last year''s memecoin frenzy, where retail investors got burned chasing hype.

The warning shot comes as publicly traded companies continue adding BTC to balance sheets like tech bros collecting JPEGs. But unlike decentralized memecoins, this bubble has Wall Street''s fingerprints all over it.

Remember when Dogecoin millionaires became Dogecoin bagholders? History doesn''t repeat, but it rhymes – especially when suits start playing with volatile assets they don''t understand. The only thing growing faster than corporate Bitcoin holdings might be the impending institutional FOMO hangover.

Source: Hosseeb/X

Will treasury firms blow up?

Zaheer Ebtikar, founder of crypto fund Split Capital, echoed Qureshi’s remarks but added that the narrative will be shorter than the ‘memecoin supercycle.’

“Markets get smarter over time, and as a result, every new Meta is shorter and shorter lived…Memecoin euphoria, now —> public vehicles. They all live shorter lives as a function of market forces.”

Bitcoin and Ethereum treasuries collectively hold about $367 billion worth of capital as of June. Notably, BTC-focused firms hold 3.44 million BTC or $364B based on the current market price.

On the other hand, ETH treasury firms have accumulated 1.16 million ETH, worth $3 billion.   

Notably, most of the BTC flows from public treasuries are driven primarily by Strategy and Metaplanet. However, some analysts have raised concerns that these firms’ debt leverage to acquire BTC could trigger a market crash if they go bankrupt. 

In response, Galaxy Digital’s Alex Thorn rebutted the claims, stating that debt concerns were ‘overblown’ because most maturities will begin in 2027. 

For perspective, BTC treasuries have $12.7 billion in debt, and Strategy dominates at $8.2B or 64% of the total debt.

Nearly $10 billion of the debt stock is due for payment between 2027 and 2028. This timeline fits well with Qureshi’s projection, in case the bubble bursts. 

Source: Galaxy Research 

Overall, the crypto treasury meta has been printing more returns than the underlying assets, attracting most investors.

However, for risk management purposes, the 2027-2028 period could be a key watchlist, especially if the firms fail to pay back their debt.