The Avalanche Foundation is actively negotiating the launch of two new crypto treasury companies in the US with a goal of raising $1 billion. This initiative raises both positive and cautionary perspectives among analysts given the current market conditions.
Plan for Treasury Launch
According to a Financial Times report, one of the treasuries will be established with support from Hivemind Capital and advisor Anthony Scaramucci from SkyBridge. It aims to raise up to $500 million through a Nasdaq-listed company.
Additionally, another $500 million raise is planned through a special purpose acquisition vehicle backed by Dragonfly Capital. The deals are expected to close in the coming weeks.
Risks for Treasury Companies
The AVAX treasury plan comes as analysts warn of risks associated with falling cryptocurrency and stock prices, complicating fundraising efforts. A report from New York Digital Investment Group (NYDIG) noted that "a bumpy ride may be ahead" for Digital Asset Treasuries (DATs) due to mergers and financing deals, which could lead to a "substantial wave of selling" by shareholders.
Avalanche Community Remains Optimistic
Despite the risks, the Avalanche community has responded positively to the reported AVAX treasury plans. In the past 24 hours, the price of AVAX soared more than 7%, contributing to a positive weekly performance with a 7-day gain of 16%. This strengthens bullish demand for AVAX in light of potential pressure from any upcoming acquisitions.
In summary, the launch of two crypto treasuries by Avalanche represents a significant initiative in the current market environment. The optimism within the community and the associated risks of creating a new asset class provide an intriguing context for further analysis.
