Originally a diversified holding company with interests including regional aircraft leasing, in mid-2025 Mega Matrix shifted its focus to stablecoins and decentralised finance.
Last October, the company – which operates video streaming platform FlexTV – announced that its digital asset treasury strategy would cover ‘a diversified basket of leading stablecoins and their governance tokens’ with the dual objective of generating income from lending or providing liquidity for stablecoin pairs and allocating to governance tokens of leading stablecoin protocols.
According to Colin Butler, EVP Capital Markets and Head of Global Financing at Mega Matrix, this strategy puts the company at an advantage to first generation digital asset treasuries that lack a clear operating model.
“They are just sitting there with an asset that yields no income,” he says. “This works out as long as their market-cap-to-net-asset-value ratio is at a premium as they keep issuing shares and the capital keeps coming. But a number are now trading at significant discounts to the value of their underlying holdings.”
At that level, these companies will start attracting investors who buy the stock, push for a proxy battle and try to force the company to sell its crypto and buy back shares to close the gap. If the company capitulates, it enters a liquidation spiral and potentially unwinds to zero.
Butler claims as few as ten digital asset treasuries will prove successful in the long term and says the fall in Bitcoin has clarified what the next generation of digital asset treasury strategies needs to look like.
In his view, the treasuries that will survive downturns are those that generate yield from their holdings through staking, participation in decentralised finance protocols and building a real operating model around the assets on their balance sheet.
“If you can cover your costs from yield rather than from perpetual share issuance, you are no longer at the mercy of the market cycle,” he says. “The dividing line forming in this space right now is between passive holdings and productive assets.”
Mega Matrix has identified two steps that are required to avoid overleveraging and stock mis-valuation. The first is to build in structural protections against forced liquidation, as is the case at MicroStrategy where the capital stack has been constructed in such a way that even a severe Bitcoin drawdown doesn’t trigger a margin call.
“However, that model is extremely difficult to replicate,” acknowledges Butler. “Most other treasuries don’t have the scale, the investor base or the track record to issue convertible debt at near-zero coupon rates. Therefore, next generation treasuries have built operating models around their holdings so they are generating yield in the range of 5-10% on assets that would otherwise just sit in cold storage.”
He suggests that using qualified, regulated custodians is the minimum requirement for delivering real-time liquidity without compromising security, offering interoperability with traditional finance systems and providing transparent governance tools aligned with corporate risk policies. Beyond that, treasuries need to be thoughtful about which DeFi protocols they use for yield.
“Smart contract risk is real, although battle-tested protocols have survived stress events like the Bybit hack without breaking,” says Butler. “Institutions need professional asset management executing yield strategies within defined risk parameters.”
For a corporate treasurer, the ability to hold dollar denominated stablecoins that settle instantly, convert programmatically and earn yield while idle has the capacity to change how they think about working capital.
“Any treasury operating at an institutional scale needs third party risk oversight and clear disclosure standards,” adds Butler. “We treat our digital asset treasury with the same discipline you would expect from a traditional corporate treasury.”
