Mergers and acquisitions similar to the recent Strive and Semler Scientific deal may soon be considered by companies, according to David Duong, head of investment research at Coinbase.
Digital asset treasury companies will eventually consolidate under a few larger players as the cycle matures and companies try to attract investors, according to Coinbase’s head of investment research, David Duong.
In an interview with , Duong said that outside of strategies to boost share prices, “mergers and acquisitions may be started by companies, much like the recent Strive and Semler Scientific deal, as we approach the more mature phases of the DAT cycle.”
On September 22, asset manager turned Bitcoin treasury company Strive announced that it was acquiring fellow DAT Semler Scientific in an all-stock transaction.
At the same time, Duong said, more crypto-native strategies are also being pursued by DATs, such as generating yields through staking or DeFi looping, which involves repeatedly borrowing and repositioning the same asset to amplify returns.
“And there’s still a lot more they can do here. I think the future will depend a lot on what happens with regulatory shifts, liquidity and market pressures to get a clearer sense of where this could all go long-term.”
On September 15, Standard Chartered predicted that not all DATs will survive in the long term, which may force them to adopt new strategies or fade away.
Crypto Treasuries Target Dominance Over a Single Token
In a September 10 report, Duong and fellow Coinbase researcher Colin Basco said that the DAT race has entered a player-versus-player phase, with companies battling to stand out from the competition.
Duong said recent share buybacks from crypto treasury firms in the last few weeks are a result of this new stage.
On September 24, Thumzup, a Trump Jr.-linked media company that holds Bitcoin (BTC) and Dogecoin (DOGE), announced that a share buyback was being increased from $1 million to $10 million. The Solana (SOL) treasury company DeFi Development Corp also expanded its share repurchase from $1 million to $100 million.
“I believe where this is coming from is that companies are under the impression that only a handful of major players will dominate each token, and they are competing to differentiate themselves through either size or financial engineering,” Duong said.
“I also think this strategy likely contributed to the negative price action observed in mid-to-late September, as these entities prioritized using capital to boost stock prices over accumulating crypto.”
Some DATs have struggled to maintain share prices, with some losing up to 90% of their value. This has been attributed to market saturation and investor concerns over sustainability.
Share Buybacks Aren’t a Guarantee of Success
Duong also said that it’s his experience that a price bump may not always result from share buybacks, particularly when the action is perceived by the market as a negative signal about the company’s long-term health, because it’s ultimately “very much sentiment-driven.”
“The effectiveness of buybacks hinges on investors’ perceptions of a company’s underlying fundamentals,” he said.
“For instance, if a DAT is using buybacks as a defensive maneuver to reduce its float, but market players think the company retains an efficient capital allocation strategy and transparent funding, then its share price may benefit. Conversely, the reverse is true when the right conditions aren’t met.”
On September 12, a stock buyback was announced by TON Strategy Company, previously known as Verb Technology Company, but investors didn’t react positively, with shares declining by 7.5%.
Share Buybacks Aren’t a Guarantee of Success
DATs that have added Bitcoin to their balance sheets hold over 1.4 million coins, representing about 6.6% of the total supply, which is worth over $166 billion.
At the same time, a total of 5.49 million Ether, worth over $24 billion, has been acquired by 68 companies. Meanwhile, Solana has also seen a large uptake, with more than 13.4 million tokens, worth over $3 billion, being held by nine publicly tracked entities.
