Smarter Web Seeks to Expand Bitcoin Treasury

Smarter Web, the U.K.’s largest BTC holder, is going on the offensive. CEO Andrew Webley is eyeing distressed rivals, seeking to aggressively expand its war chest at a potential fire-sale discount.

Acquisition Plans

According to a recent Financial Times report, Andrew Webley, CEO of The Smarter Web Company, confirmed his firm is actively considering the acquisition of struggling competitors. The primary objective is a strategic expansion of its Bitcoin treasury by potentially purchasing BTC holdings at a significant discount to market value.

Stock Performance

This move comes amid a sharp decline in the company’s own stock price, which has dramatically underperformed Bitcoin over the past month. Smarter Web’s stock performance has starkly decoupled from the asset it holds. While Bitcoin declined just over 4% in the past month, the company’s share price plummeted approximately 35.5%, including a nearly 22% single-day drop on Friday.

Vulnerability in Treasury Vehicles

The significant underperformance highlights a critical vulnerability: investor sentiment toward treasury vehicles is becoming increasingly fragile, independent of Bitcoin’s own price action. This raises concerns about the long-term sustainability of these companies.

A Brutal “Player vs Player” Stage

The timing of Webley’s maneuver aligns with a sobering warning from Coinbase researchers that the sector is entering a brutal “player vs player” stage. Head of research David Duong and researcher Colin Basco recently stated that crypto-buying public companies will now compete far more fiercely for investor capital. They predict that while a handful of “strategically positioned players will thrive,” the market segment is quickly becoming oversaturated, implying many of these treasuries will not survive long term.

Risks of the Bitcoin Treasury Model

Meanwhile, back in June, analysts at Standard Chartered, led by Geoffrey Kendrick, issued a prescient warning about the inherent risks of the Bitcoin treasury model. Kendrick cautioned that the premium at which these companies trade relative to their underlying BTC holdings is unsustainable, especially as access to Bitcoin through regulated ETFs and ETNs becomes easier. He ominously suggested that a drop below $90,000 could put half of all Bitcoin treasury companies underwater on their holdings.

Conclusion

As the Bitcoin treasury market continues to evolve, companies like Smarter Web are seeking to adapt and expand their holdings. However, the warnings from Coinbase researchers and Standard Chartered analysts highlight the potential risks and challenges facing these companies. It remains to be seen how the market will unfold, but one thing is certain - the future of Bitcoin treasury companies will be shaped by their ability to navigate this complex and rapidly changing landscape, with news and updates available on bitpulse.