Top Bitcoin miner MARA issues warning on treasury boom, possible BTC price pressure: 'They can't all be successful'

MARA Holdings CEO Fred Thiel issued some warnings Tuesday when reflecting on the surge of BTC treasury companies. He said that too many companies rushing to stockpile Bitcoin could backfire for investors while also putting pressure on BTC's price.

"Any advantage in any market starts disappearing when you have lots of companies going after it… they can't all be successful," Thiel said during an earnings call Tuesday. With a market cap north of $6 billion , MARA is the largest publicly traded bitcoin mining company by market capitalization. It also maintains the second-largest Bitcoin stockpile of public companies, after Strategy.

Thiel respects the success Michael Saylor's Strategy has had in generating shareholder value while pioneering the Bitcoin treasury company model. But too many companies chasing the same type of returns could introduce risks.

Following in Strategy's footsteps, and amid bitcoin's price climbing to all-time highs after President Donald Trump took office, in the past year, the cumulative holdings of Bitcoin treasury companies have nearly tripled to 774,000 bitcoins (over $90 billion), according to The Block Data Dashboard . Strategy is by far the largest holder with over 620,000 BTC.

It's estimated that over 200 firms have adopted a form of crypto reserve strategy, with the largest concentration present in BTC treasury companies.

Not Bitcoin ETFs

Multiple of Net Asset Value, or mNAV, is a metric that is increasingly being used to assess the health of publicly-traded digital asset treasury companies and is calculated by dividing an organization’s enterprise value by the value of its token holdings. Thiel warned that some treasury companies' mNAV could come under pressure if market conditions shift.

"What happens to those companies that are holding coins when their mNAV goes to one or worst case, like what happened to Grayscale during a period [that] the mNAV goes negative? They likely will have to sell those coins," Thiel said.

At one point, Grayscale's Bitcoin Trust (ticker GBTC) traded at a premium to its mNAV. Later, however, with more competition, GBTC began trading at a discount to BTC's price, and Grayscale was forced to halt inflows. Grayscale converted GBTC into an exchange-traded fund that saw billions of dollars in outflows while BlackRock and Fidelity's spot Bitcoin ETFs grew.

"Bitcoin treasury companies are not like an ETF," said Thiel.

Treasury companies 'a bit like ICOs'

If Bitcoin's price declines, treasury companies could suffer much more than ETF issuers.

"If you see any momentum to the downside, you may see a lot of selling, which will just accelerate things," Thiel said. "These treasury companies are, again, a bit like ICOs, and I think that's too much of a good thing. Ruins the returns for everybody."

The ICO, or initial coin offering, boom of 2017 brought in billions of dollars before eventually crashing. Many projects were accused of being fraudulent. 

Thiel throwing shade at the crowded field of Bitcoin treasury companies could also be tied to his desire to position MARA as a more attractive investment.

"Our treasury has positioned us as one of the largest corporate holders of bitcoin globally, and we are proud of that position," MARA said in its second-quarter earnings release. "But unlike bitcoin treasury companies what sets MARA apart is how we got here: the majority of our bitcoin was mined, not purchased."

But MARA has made efforts beyond mining to add to its Bitcoin stockpile. The company said Monday it had raised approximately $940.5 million  to fund additional bitcoin purchases and general corporate purposes.

Despite MARA reporting all-time quarterly highs for adjusted EBITDA, revenue, and net income, the company's shares have remained relatively quiet (up 2.95%) in Wednesday's session.

Whales selling at peak

While Thiel doesn't see bitcoin's price plummeting amid the frothiness around BTC treasury companies, he appears to think a price correction could be around the corner, given recent trading activity.

"When the whales that have been holding are selling, it tells you something… They sell into the top in the market," he said. "The people who are buying and, looking to build treasury companies, are buying at the absolute top of the market. And at some point demand will waver."

Thiel said he doesn't think bitcoin will decline as much as 80%. "But it could drop 20% [or] 30%," he said.