In a crypto gold rush moment, who are the shovel sellers?

I saw an interesting headline today on Cointelegraph and it read “The corporate Bitcoin gold rush is on — but at what cost?”

Here's an excerpt:

They’re being called “infinite money machines” by some, and “a ticking time bomb” by others. Welcome to the world of Bitcoin treasury companies, publicly traded firms that are rewriting the rules of corporate finance by converting capital into Bitcoin.

These companies are leveraging gains to boost their stock price, and using momentum to buy even more Bitcoin. It’s a cycle that, so far, has been wildly profitable.

At the heart of this movement is Strategy — formerly MicroStrategy — which holds more than 590,000 BTC valued at over $60 billion. The company has become one of the most prominent corporate holders of Bitcoin. And it’s not alone. Over 130 companies have added the cryptocurrency to their balance sheets, and the number keeps growing. — Cointelegraph

The report links to a Video on YouTube by Cointelegraph exploring the topic, more broadly, I presume — haven't watched, don't personally expect much to be there.

That said, I wanted to focus more on something else, something that the linked report didn't consider — obviously this wasn't the point of their article/video, so that's understandable.

Bitcoin treasury companies are taking on significant risks. It's a present factor that we can't just say “oh BTC price appreciates overtime, so it doesn't really matter” — actually, it does matter because we are dealing with debt financing of investments into the most volatile trillion dollar asset in the world.

Loans acquired by these companies have varying terms, most of which will not be covered by the media until something goes wrong and they need to read the details. Common events that can force this outcome is if the stocks of these Bitcoin treasury companies crashes and worse, Bitcoin crashes alongside.

Notwithstanding, we too, are not really interested in exploring the deeper lying risks right now, so let's look at what most people aren't talking about.

Crypto’s gold rush moment

Beyond bitcoin, is an impending crypto gold rush moment.

But what even is a gold rush moment?

The Gold Rush refers to a period of intense migration and economic activity triggered by the discovery of gold in a particular region. People, often called "prospectors" or "forty-niners" (in the case of the California Gold Rush), would flock to the area hoping to strike it rich. — ChatGPT summary.

How does this relate to crypto?

There's a business metaphor that originated directly from the California Gold Rush (1848–1855).

An idea that has become popular and is applied in business and investing.

"During a gold rush, sell shovels.”

Although most people think of it literally, selling shovels is just a metaphor that means “Don't chase the hype, instead, support the hype by selling what the chasers need.”

Of course, in some cases, supporting the hype could actually mean selling shovels.

When it comes to the crypto gold rush moment, there are a lot of ways to be the shovel sellers because the truth is, a lot of people are going to come in with high expectations and are going to be rekt or just disappointed, just as very few struck riches in the gold rush.

In a crypto gold rush, some ways to sell shovels is to sell graphics cards, mining rigs, or offer crypto courses(education). Some of us can already think of those standing to profit here.

In the long term however, what's bound to outperform those listed examples, in sustainability, value generation and essentially net profits is decentralized exchanges.

Yes, it's not something a lot of people think about, but at the end of the day, our industry is going to be filled with so many crypto assets, so many different blockchains and projects and all of these directly means a growing number of markets where trades will occur 24/7.

Enabling the behavior of the rush lies in offering a frictionless means of making those hype trades.

Decentralized exchanges, even though not designed as traditional banks, will be the middlemen in crypto. Not as a centralized entity, but simply an autonomous bridge that enables peer-to-peer trades across various ecosystems.

Investing in improving our decentralized exchange offerings is crucial to competing in future markets. In many cases, decentralized exchanges will be used by so many businesses in ways that are not even known to users.

This is because when businesses want to prioritize user friendly, they will leverage solutions that can function in the backend to facilitate smooth use of their services.

This is why decentralized exchanges will be the bigger winners, even when the rush is over and the ecosystem becomes an economic system with projects prioritizing value generation through sustainable designs.

Posted Using INLEO