Crypto Treasury Companies Face Dotcom Bust Comparison as Risk Warnings Mount
Ray Youssef, founder of peer-to-peer lending platform NoOnes app, warns that crypto treasury companies pose risks similar to the 2000s dotcom bubble that caused stock markets to sink 80%. According to Cointelegraph, the same investor psychology that led to over-investment in early internet companies persists despite institutional presence in cryptocurrency markets.
Youssef told reporters that both dotcom companies and today's crypto treasury firms attract enthusiasts and opportunists with bold visions that appeal to mass markets. He predicts most crypto treasury companies will fail and be forced to sell their holdings, creating conditions for the next bear market. Only select companies with responsible management will survive and continue accumulating crypto at discounted prices.
Crypto treasury companies have dominated headlines during this market cycle as institutional investment positions cryptocurrency as a mature global asset class courted by corporations and nation-states.
Corporate Treasury Strategy Creates Mounting Financial Pressure
The crypto treasury trend presents immediate risks for participating companies and their shareholders. Companies following this model depend on persistent equity premiums to net asset value, driven by cryptocurrency price appreciation. Galaxy Digital warns that when hundreds of firms adopt the same strategy of raising equity to buy crypto, the structure becomes fragile.
Research shows Digital Asset Treasury Companies now control over $100 billion in digital assets. When investor sentiment, crypto prices, or capital market liquidity decline, the interconnected nature of these trades can create rapid unwinding. Galaxy researchers note this mirrors investment trust speculation of the 1920s, when new trusts launched daily and Goldman Sachs Trading Corporation became that era's equivalent of today's Strategy.
We previously reported that corporate Bitcoin adoption reached historic levels in 2025, with 75 new firms adding cryptocurrency to their balance sheets. However, recent data shows monthly adoption rates dropped 95% since July, suggesting institutional enthusiasm may be cooling as market realities set in.
Systemic Risks Threaten Broader Cryptocurrency Markets
The concentration of crypto treasury companies creates potential spillover effects across digital asset markets. Private investment in public equity deals present particular dangers, according to analytics platform CryptoQuant. Companies that raised capital through these arrangements face growing risks of 50% stock price crashes as lock-up periods expire and investors exit positions.
CryptoQuant researchers found that PIPE-backed treasury companies already suffer steep declines, with share prices gravitating toward issuance levels. One stark example involves medical company Kindly MD, which pivoted to Bitcoin treasury holdings but saw its stock fall from $52 to current levels around $11. Other firms following similar patterns include Strive Inc., which dropped 78% from its May peak to $2.75.
The systemic nature of these risks extends beyond individual companies. Treasury company outflows could exert significant downward pressure on digital asset prices themselves. While inflows from these firms have served as persistent buying support for Bitcoin, redemption-driven outflows would likely create opposite effects. Market analysts warn that only sustained Bitcoin rallies above current levels can counteract downward pressure facing treasury stocks tied to PIPE financing deals.
Financial institutions express growing concern about leverage injection into cryptocurrency markets through these corporate vehicles. Investment professionals note similarities to historical market bubbles where concentrated trading strategies created compounding risks that spread through financial systems before dramatically unraveling.
