ETF expert Nate Geraci, also the President of Nova Dius Wealth, made a bold prediction that the approval of generic listing standards for Crypto ETFs, could be a death-knell for digital asset treasury firms like MicroStrategy (MSTR), Metaplanet (MTPLE), Bitmine (BMNR), etc. He cited a WSJ article that notes that unusual trading activity in crypto treasury deals has drawn strong attention from US regulators.
Crypto ETFs Could Challenge DATs
As per the latest report from Wall Street Journal, financial regulators are reviewing unusual trading activity in the shares of companies that have adopted cryptocurrency as a core part of their corporate strategy. Both the US SEC and FINRA have examined trading patterns ahead of crypto-treasury announcements. A number of companies have joined the race for building a crypto treasury, for assets like BTC, ETH, SOL, etc.
Lawyers familiar with the matter stated that such FINRA letters often lead to deeper inquiries into insider trading-related issues. David Chase, a former SEC enforcement lawyer, said:
“When those go out, it really stirs the pot. It’s typically the first step in an investigation. Whether it goes full, full length, it’s anybody’s guess.”
Speaking on the development, ETF expert Nate Geraci said the U.S. Securities and Exchange Commission’s (SEC) new generic listing standards could mark the end of Digital Asset Treasury (DATs) firms. Geraci argued that DATs have largely benefited from regulatory arbitrage, but the landscape is shifting.
He added that approval of staking within ETFs would further diminish their relevance, calling it “pretty much game over.” The first Ethereum staking ETF went live yesterday in the US.
Geraci advised that investors should stick to spot crypto ETFs, or the underlying assets themselves, rather than trading the stocks of crypto treasury firms like Strategy (MSTR), BitMine (BMNR), Metaplanet (MTPLF), and others.
Does It Mean the End of MSTR, MTPLF, BMNR, Etc?
Crypto stocks, especially those related to crypto treasury firms have rallied in recent weeks, taking the Wall Street by storm. The treasury firm stocks have seen a parabolic rally in the past few months. However, Nate Geraci said that with crypto ETFs, this might not be sustainable!
However, Bloomberg ETF analyst James Seyffart pushed back against concerns that spot ETFs could undermine crypto-linked firms. Seyffart noted that exchange-traded funds “didn’t kill” MicroStrategy (MSTR) and similarly won’t be able to deploy capital within decentralized finance ecosystems such as Ethereum (ETH) or Solana (SOL) to generate yields. He acknowledged that many existing products in the market may not survive in the long term.