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<p>The digital asset sector (DAT) continues to expand, but Coinbase’s head of investment research, David Duong, expects the landscape of corporate crypto treasuries to narrow. Many smaller treasury players are likely to be acquired or merge, leaving only a handful of leading firms.</p>
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  <h2 class="in-brief--title" id="in-brief">In brief</h2>
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   <li>David Duong from Coinbase expects smaller treasury firms to merge or be acquired as the market consolidates toward larger players.</li>
   <li>Treasury firms are adopting crypto-specific strategies such as staking and DeFi looping to enhance returns.</li>
   <li>Over time the market is likely to be dominated by a few strong treasury players able to maintain scale, investor confidence, and resilience.</li>
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<h2 id="h-treasury-firms-embrace-strategic-acquisitions">Treasury Firms Embrace Strategic Acquisitions</h2>
<p>This shift, Duong explained, reflects the way companies are positioning themselves to draw investor attention. In his view, the maturing stage of the industry will not be driven only by efforts to lift share prices but also by corporate combinations. He pointed to a recent example: in late September, Strive, a former asset management company that transitioned into a Bitcoin treasury firm, <a href="https://www.cointribune.com/en/bitcoin-institutions-take-back-control-with-massive-purchases/" target="_blank" rel="noopener noreferrer nofollow">agreed to acquire Semler Scientific in an all-stock deal</a>.</p>
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<p>For Duong, such activity signals how these firms are beginning to treat mergers and acquisitions as a core part of their growth strategies, instead of depending solely on financial manoeuvres tied to their stock performance.</p>
<h2 id="h-risk-returns-and-rivalry-in-treasury-holdings">Risk, Returns, and Rivalry in Treasury Holdings</h2>
<p>Alongside structural shifts, Duong noted that treasury firms are using strategies specific to cryptocurrencies to enhance returns, including <a href="https://www.cointribune.com/en/what-is-staking-a-full-guide/#:~:text=Staking%20is%20a%20method%20used,Cardano%20(ADA)%3B" target="_blank" rel="noopener noreferrer nofollow">staking</a> and DeFi looping. He cautioned, however, that the longer-term trajectory of this market will hinge on broader conditions.&nbsp;</p>
<p>Factors such as regulation, liquidity, and overall market stability will have a major influence on whether these strategies succeed.</p>
<p>Building on this, Duong and Coinbase researcher Colin Basco <a href="https://assets.ctfassets.net/k3n74unfin40/5ySHPvEyMQ3j1NRz4cR84L/8ee2f2270b207f4ccd5171624bc34283/Monthly_Sept_2025.09.pdf" target="_blank" rel="noopener noreferrer nofollow">outlined the state of public treasury</a> holdings in a September research note, providing the following figures.</p>
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 <li>As of September 10, public digital asset treasuries collectively held more than 1 million Bitcoin valued at about $110 billion.</li>
 <li>They also reported holdings of 4.9 million Ether worth $21.3 billion.</li>
 <li>In addition, these firms controlled 8.9 million Solana tokens with a total value of $1.8 billion.</li>
 <li>Duong and Basco further noted that newer participants in the market are moving further out on the risk curve by directing capital into smaller altcoins.</li>
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<p>The same report described the broader environment as a “player-versus-player” stage. In this phase, treasury firms are competing for visibility, and this rivalry is expected to keep most capital flowing toward the larger and more established cryptocurrencies.</p>
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<h2 id="h-competition-market-pressure-and-industry-consolidation">Competition, Market Pressure, and Industry Consolidation</h2>
<p>Duong also noted in comments to Cointelegraph that many treasury operators appear to be working on the assumption that only a limited number of <a href="https://cointelegraph.com/news/crypto-treasury-more-merger-acquisition-cycle-mature" target="_blank" rel="noopener noreferrer nofollow">dominant holders will emerge for each major token</a>. This has encouraged firms to either focus on scaling their operations quickly or to lean on financial measures such as share buybacks.</p>
<p>According to him, this approach may have contributed to weakness in the sector during mid- to late September. Instead of expanding their crypto reserves, companies directed significant capital toward stabilising or lifting their own stock prices, which left them vulnerable during the downturn.</p>
<p>The consequences have been severe for several publicly traded treasury firms. Share prices have dropped sharply, in some cases by as much as 90%. Such declines have raised concerns about oversaturation in the market and uncertainty over whether these firms’ models can hold up over time.</p>
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<p>Reflecting on these trends, it appears that the digital asset treasury industry is unlikely to sustain all existing firms. Over time, the <a href="https://www.cointribune.com/en/the-crypto-market-regains-momentum/" target="_blank" rel="noopener noreferrer nofollow">crypto market</a> is expected to consolidate, leaving only a few strong players able to maintain scale, investor confidence, and resilience amid changing conditions.</p>

Coinbase Warns of Consolidation Among Crypto Treasury Firms

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