Solana is more likely to drive the bubble cycle than Ethereum this time around.
So far, the short history of cryptocurrency is a story of market bubbles, much like the historical bubbles you’ve probably heard of in tulips or dot-com companies, each driven by a shiny new idea that kept getting shinier until, suddenly, it didn’t. The 2021 crypto boom and bust taught investors that euphoria can vanish overnight. Yet, despite many people learning painful lessons last go-around, prices are now rumbling higher again.
The next bubble, whether it’s quietly forming now or arrives in a year or further in the future, won’t look like the last one. On that note, I have three predictions about the next crypto bubble.
Crypto treasury companies, like Strategy (NASDAQ: MSTR) (formerly known as MicroStrategy), keep buying Bitcoin (CRYPTO: BTC) by the thousands. Strategy now controls roughly 3% of the coin’s capped supply, a feat that’s encouraged dozens of copycats to follow suit and add Bitcoin to their balance sheet.
Crypto treasuries were a Bitcoin-only club in 2020, but the playbook has evolved. Now, altcoins and even meme coins are being gobbled up by treasury companies, and I predict that’s what will be one of the defining features of the next bubble and the crash that follows.
A new twist emerged this month. Failed or struggling businesses in many different industries are pivoting into the wildest crypto treasury strategies they can manage.
For instance, a tiny pork-processing company that later turned into a Bitcoin mining operation raised $500 million to build a Dogecoin hoard, positioning itself as the Strategy of meme coins. If that sounds ridiculous, it’s because it is. However, it shows how far down the risk curve treasury strategies can travel once boardrooms arrive at the (questionable) conclusion that such coins are balance sheet rocket fuel.
If the bubble gathers steam, expect other unknown but public companies to announce punts on everything from lesser-known meme coins with small market caps to illiquid non-fungible tokens (NFTs), betting the market will reward them for their bold vision.
The upside is obvious here. Scarce float of these assets pushes prices up when treasurers pile in to buy them, but the risk is equally clear. Concentrated corporate holdings become forced sellers if credit markets seize up.
