The crypto market cap — the value of all cryptocurrencies — has fallen by over 30% in the past three months. That’s a tough pill to swallow for crypto treasury firms, which gained traction last year when prices were soaring. Many use capital, often raised by issuing equity or convertible debt, to buy cryptocurrency.
Image source: Getty Images.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue ”
Also known as digital asset treasuries (DATs), the majority of these companies hold Bitcoin (CRYPTO: BTC), but some have also focused on Ethereum (CRYPTO: ETH) and Solana (CRYPTO: SOL).
The challenge is that the value of their crypto holdings has plummeted, and many are underwater. They may need to sell their crypto this year to service the debt. Investors may also turn to cryptocurrency ETFs. Here’s how those two predictions might unfold.
Crypto treasury firms have followed different playbooks. Each approach, particularly fundraising, will impact their ability to weather a prolonged slump. Broadly speaking, there’s a significant risk that companies will be unable to refinance their debt or face margin calls on leveraged positions. Forced selling could push crypto prices lower, creating a vicious cycle.
Strategy (NASDAQ: MSTR), formerly known as MicroStrategy, which pioneered the DAT model, insists it will not sell its crypto, even though its market cap is currently lower than the value of its Bitcoin holdings. Mara Holdings (NASDAQ: MARA), however, may soon sell some of its Bitcoin. Its market cap is $3.05 billion, and its Bitcoin is worth $3.69 billion. On-chain data shows Mara recently moved almost 1,400 BTC to wallets and exchange addresses, which could signal it is readying for a sale.
Meanwhile, BitMine Immersion Technologies (NYSEMKT: BMNR) is sitting on around $7.5 billion in unrealized paper losses. The Ethereum-focused crypto treasury company raised money through private investment in public equity (PIPE) deals. Issuing new stocks can dilute stock value — BitMine is down almost 60% in the past six months.
Even so, the company recently bought more Ethereum and says it can weather the current price slump. That may be the case, but the company is in a precarious position, and a lot depends on how long prices remain low.
Crypto ETFs and DATs both offer alternative ways to buy cryptocurrency. Some investors don’t want to open an account with a crypto exchange and figure out how to store their assets. Crypto treasury firms carry more risk than passively managed ETFs — including more rights if the company or fund liquidates.
For a time, one of the appeals of DATs was that they offered features — such as staking and leverage — that weren’t available in ETFs. Staking is important because it is a way to earn yield on certain cryptocurrencies.
However, that’s changing. The SEC has already green-lighted a number of altcoin ETFs and leveraged ETFs, albeit with limited leverage. It looks likely to approve staking ETFs this year.
The future of cryptocurrency is difficult to predict because this is still a relatively new and untested asset class. However, it looks like crypto treasuries will be under pressure in 2026, particularly if this slump continues. Unfortunately for crypto investors, if they fall, it will impact the whole ecosystem.
Before you buy stock in Bitmine Immersion Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bitmine Immersion Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $414,554!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,120,663!*
Now, it’s worth noting Stock Advisor’s total average return is 884% — a market-crushing outperformance compared to 193% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
Emma Newbery has positions in Ethereum and Solana. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.
Read more on NASDAQ Stock Market
