CNBC's Tanaya Macheel joins 'Closing Bell Overtime' to break down why crypto treasuries have seen dramatic pull backs in August.

New York

Crypto treasury firms that previously experienced significant stock gains have seen a notable pullback in August. While some companies like ETHZILLA and Bitmine, both backed by Peter Thiel, have outperformed, others such as Strategy have lagged, largely due to differences in their cryptocurrency holdings and strategies. DeFi DevCore, focused on Solana, emerged as the top performer in the recent period, though Strategy has delivered higher returns over a longer timeframe.

Industry experts emphasize that the presence of high-profile backers and capital markets experience are crucial factors for investors assessing these firms. The timing of each company's crypto strategy announcement also significantly impacts short-term performance. Despite the recent downturn, none of the major firms have posted negative returns since their respective strategy launches.

Crypto treasury stocks see pullback in August

So Treasury firms whose shares once soared are now tumbling, at least for the month of August. Today, McKeel is here with a look at the big winners and losers and why there has been such a turn in sentiment. Why has there been such a turn in sentiment? Yeah, Morgan, so the summer rally in some crypto Treasury firms has cooled dramatically this month, but that could resume depending on how dovish the Fed sounds in Jackson Hole later this week. With the pullback, we took stock of their performance. ETHZILLA, which is backed by Peter Thiel and Tom Lee's Bitmine, which is also backed by Peter Thiel, are the outperformers this month. Solana focused DeFi DevCore is the biggest of the winners this month. Strategy is the biggest loser. No surprise because it's been tracking Bitcoin instead of ETH. Now, these are not apples to apples comparisons. These companies buy different coins. Some have really high profile teams and backers, which it turns out is one of the most important things for investors to consider about this cohort. Investors I spoke with from Pantera, Galaxy and others behind big deals like Bitmine, Sharplink, Reserve One really underlined that point. Also, these firms announced their crypto strategies at different times. So it should be noted that changes that that changes the performance drastically over the short period. So by that measure, going back to the date of the announcement, no real losers who are actually in the negative yet. But DeFi DevCore, which buys Solana and got an early start in April, is the big winner. Strategy, of course, a bigger return since its announcement a whole five years ago, but not by very much, Morgan. I think about twenty eight hundred percent since 2020 versus DeFi DevCore's twenty six hundred percent gain since this April. Oh, no, but twenty eight hundred, twenty six hundred. There's a lot of noise here. There's a lot of excitement. There's a lot of buzz, I guess, just to put a fine point on it. How do you cut through that to figure out what's in the realm of possible and in terms of making an investment here versus what might just be more hype than reality? Yeah, so I've talked to a lot of VC types who are behind big deals. A lot of a lot of names that have gotten a lot of attention but haven't even started trading yet. So we have that coming at the end of the year. And they really emphasized the big, high profile backers, whether that is someone like Tom Lee or Peter Thiel or even just big investors who have experience in the capital markets. Because thus far, crypto has not really been in the public realm. So it's something that you do get a lot. You know, when you're looking at stocks, you don't see it a lot in crypto. So to see people who have that capital markets experience backing or supporting deals like this is what is going to separate the ones that last, which could be a handful from the many, many that, you know, are bound to not last. And I think that these VCs, VC types, the Panteras of the world, you know, they say they're talking to dozens and dozens every couple of weeks.

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