Crypto Treasury Firms Abandon Ship for Artificial Intelligence
As the crypto market struggles, digital-asset treasury (DAT) firms are turning to artificial intelligence (AI) in hopes of reviving investor confidence. At least a dozen DAT companies have shifted their focus from cryptocurrencies to AI-related ventures after seeing their share prices and token values decline. However, early results are bleak, with K Wave Media plummeting 71% since pivoting toward data center development in May.
Industry observers believe that most DAT firms are either making the switch or facing a slow death. The collapse of the crypto treasury trade has left these companies struggling to stay afloat, and their shares have declined significantly: U.S. and Canadian treasury stocks tracked by Bloomberg have posted a median decline of 43% this year.
Bitcoin miners, on the other hand, may have a more credible path into AI. Their power contracts, land, and data centers can be adapted for high-performance computing, as seen with Coreweave's success. The company began as a miner before becoming a cloud-computing provider and now has a market value of about $40 billion.
Former bitcoin miners Hut 8, Iren, and Terawulf have also attracted investors after redirecting their capacity toward AI workloads. However, Daniel Forman, a partner at Lowenstein Sandler, believes that DATs as we've seen them are likely done: 'I think DATs, as we've seen them, are probably done.'