Good, Average, Bad: Six Scenarios Analyzing the Final Outcome of Encryption Treasury Companies

Author: 0 xTodd

Good ending 1 - Bagged

When the price of crypto assets is significantly higher than their cost basis, they cash out under shareholder/tax requirements, although the withdrawal address slightly affects unrealized gains.

Weichai has previously transferred some coins "Optimize Taxation", which did not result in a checkout or a major market crash.

But for their capital scale - it doesn't matter. Average cost 3000, sell at 6000, big funds are already very pleased.

Happy Ending 2 - Unrequited Love

If they make enough money, human nature is to replicate their successful path. Those who started with Ethereum DAT may try to create other altcoins in the future, and at that point, they might change their vehicles.

Ordinary Ending 1 - Hedge Out

If they believe that holding the assets is nearing a peak, they will stop buying and even prepare to sell.

Even though their on-chain addresses are transparent, it does not prevent them from discreetly hedging through contracts and options, thus retaining a small portion of their victories.

Ordinary Ending 2 - No One Cares

If mNAV remains below 1 for a long time, the company will consider that continuing to issue stocks is a loss, so at this point, it may sell some coins to appropriately pull back mNAV.

In my experience, among all the anchors in the world, only the "two-way hard currency anchor" is effective; relying solely on "psychological anchors" without any projects cannot stabilize it.

Bad Ending 1- Funding Pressure

For example, in 2022, Tesla had to sell 3/4 of its Bitcoin holdings due to financial pressure. These institutions may face similar financial pressures at some point in the future.

Bad ending 2 - Stop loss

If the reverse operation is done incorrectly, the cost of building positions is significantly higher than the current price, making it impossible to continue the game. One day, you can only cut losses and attempt to recover through a lower bottom.

Of course, these are just long-term conjectures and do not represent my current bearish view or negative opinion on DAT. When the drums are still beating, we should continue to play music and dance.

As for when the drumbeats will stop? That will be shared in the next post, mainly focusing on three key indicators: the cost of building positions, personnel changes in the CEO/CFO/Board of Directors, and mNAV being consistently below 1.