More and more traditional companies are beginning to experiment with digital assets as part of their financial strategies, indicating a shift in how companies view Crypto’s role in financial management.
This week alone, companies in as diverse sectors as agriculture, consumer manufacturing and even Japanese textile companies of nearly 80 years have announced allocations to tokens such as Bitcoin (BTC), XRP (XRP), and Solana (SOL).
On Wednesday, agricultural technology company Nature’s Miracle announced it would allocate up to $20 million to XRP (XRP)’s Department of Corporate Treasury, making it one of the latest companies moving to the Altcoin Treasury strategy.
Consucter Manufacturing Company Upexi on Wednesday disclosed the acquisition of 83,000 SOL (SOL), worth $16.7 million, for the Ministry of Corporate Treasury.
The day before, Kitabo, a publicly listed Japanese company that is primarily involved in textiles and recycling, revealed its plans to buy 800 million yen or about $5.6 million in Bitcoin to prepare the company.
With the rise of Bitcoin finance companies, the options for the Corporate Treasury Department have expanded, with many companies considering digital assets in their financial strategy. As the trend increases, analysts warn of rising markets for cryptocurrency companies and investment risks.
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Risks related to growth trends for cryptocurrency companies
Crypto Holding Firms, which includes Bitcoin finance companies, has some legal and market risks that analysts warn that these companies could burst, causing wider fallouts in the crypto market.
According to a June report by Venture Capital Company Breed, Bitcoin Finance companies are the only surviving Bitcoin Finance companies.
The authors of the report argued that even a minimal drop in Bitcoin’s price would be forced to sell BTC to cover its debt, which could lead to lower prices and dry corporate credit.
Digital asset holding companies could also face costly investor litigation if the crypto market does not work or if traditional financial indicators like stock prices sink.
These risks are exacerbated by Altcoin holding companies. This holds inflation assets that experience a 90% drawdown during the market cycle and may peak during a single market cycle.
“Altcoins don’t have floors, so they cook “music stops,” but BTC finance companies have floors, which are independent of them and tend to rise over time.”
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