The Capriole Investments founder has explained how the unwinding of Bitcoin treasuries could make LUNA and FTX crashes look like ‘child’s play.’
Bitcoin Treasury Company Count Has Climbed To 2002025 particularly saw DAT strategies gain traction, with companies not only looking at Bitcoin as a treasury asset, but also other coins like Ethereum and Solana. Following this boom, BTC treasury companies now number in the hundreds.
Edwards has given a warning about these firms, however, saying, “The DAT model is a leverage explosion waiting to happen.” The analyst has compared the growth in DATs to the trajectory followed by investment trusts in the 1920s, noting that the only difference between the two is that trusts bought stocks, while DATs are buying Bitcoin.
“There is no sustainable business model for generating yield on a fixed supply asset, which incentivizes leverage when mNAVs collapse,” explained Edwards. The stock buying boom in 1920s from the investment trusts helped fuel a market bubble that ultimately burst toward the end of that decade. Below is a chart shared by the analyst that compares the trajectories followed by investment trusts and Bitcoin DATs.
From the graph, it’s visible that investment trusts initially followed gradual growth, but then in the 1920s, their growth gained acceleration. Something similar has happened with DATs, just on a much smaller timeframe.
At the end of 1929, there were around 600 investment trusts, while today, Bitcoin DATs number at about 200. Thus, BTC DATs are still behind in count. “How big can the DAT bubble grow? That’s the million dollar question,” said the Capriole founder, noting that the trust bubble went on for nearly a decade.
The cryptocurrency market has been facing a downturn recently, and, since the treasury boom occurred in 2025 and companies bought at bull run prices, DATs have come under pressure. Even Strategy with its history of buying at varied prices has seen its massive 713,502 BTC holdings dip into the red.
BTC PriceAt the time of writing, Bitcoin is floating around $74,500, down 16% in the last seven days.
