He further questioned the stability of these treasuries during a bear market, suggesting that many could be forced to sell off their Bitcoin holdings.

Willy Woo, a prominent Bitcoin analyst, warns that the opaque debt structures of Bitcoin treasury firms and their reliance on custodied ETFs pose significant risks of systemic collapse or government interventions during market downturns.

Despite Bitcoin's current market cap of $2.42 trillion, which is substantially smaller than gold's $23 trillion and the US dollar's money supply, there is a pressing need for growth to sustain demand and adoption.

Woo expresses concern that large institutional investors are not self-custodying Bitcoin, which increases their exposure to risks from intermediaries and potential government actions during market instability.

Willy Woo describes Bitcoin as the 'perfect asset' for the next 1,000 years due to its scarcity and censorship resistance, but emphasizes the need for over $21.9 trillion in capital to compete with the US dollar and gold.

Woo also expressed concern about how Bitcoin treasury adoption could be affected by a bear market, questioning how many coins might flood back into the market during such downturns.

Despite Bitcoin's strong fundamentals, challenges such as scaling, institutional custody risks, and macroeconomic pressures could significantly impact its long-term viability.

The ongoing debate within the crypto community focuses on balancing Bitcoin's growth potential with the inherent risks it faces, indicating that its future will depend on technological advancements and macroeconomic factors.

Industry leaders, including Back and Kei, advocate for a gradual transition in Bitcoin adoption from custodians to individuals, which could normalize its use and mitigate associated risks.

Max Kei, CEO of Debifi, noted that self-custody is expected to gradually spread from institutions to individuals and businesses, promoting broader adoption of Bitcoin.

Adam Back, CEO of Blockstream, argues that companies are the most logical starting point for Bitcoin adoption, suggesting that firms unable to achieve better returns elsewhere should consider investing in Bitcoin.

He pointed out that large investors are opting for institutional solutions like ETFs instead of self-custody, which could expose them to risks associated with nation-state interference.