The extended crypto downturn has left a deep mark on digital asset treasury companies, exposing the fragility of a business model built around holding volatile crypto assets on corporate balance sheets.
Bitcoin and Ether have both fallen sharply over the past month, and with them, the valuations of firms that rely heavily on these holdings for their value.
A new analysis by on-chain data firm CryptoQuant highlighted the pressure facing such companies, naming Evernorth, an XRP-focused treasury, as a key example.
The firm has reportedly suffered $78 million in unrealized losses on its XRP position just weeks after acquiring the tokens.
Even established giants like Strategy (MSTR), the original Bitcoin treasury play, have been hit hard.
Strategy’s stock has dropped 26% over the past month amid Bitcoin’s pullback, and is now trading more than 50% below its all-time high, according to Google Finance.
Still, the company remains in the green on its Bitcoin reserves, with an average cost basis around $74,000 per BTC, according to data from BitcoinTreasuries.net.
The pain isn’t limited to Bitcoin treasuries. BitMine, the largest Ether-holding corporation, is now sitting on roughly $2.1 billion in unrealized losses tied to its 3.4 million ETH holdings.
The firm acquired over 565,000 ETH in the past month alone, deepening its exposure to Ethereum’s price swings.
The selloff has reignited debate over the sustainability of digital asset treasury companies (DATs), firms that mirror Bitcoin’s “digital gold” thesis by holding crypto as a strategic reserve. Analysts have warned that many DATs are facing severe valuation stress as their market net asset value (mNAV) collapses in tandem with crypto prices.
Some venture analysts, including those at Breed Capital, argue that Bitcoin-focused treasuries may be the most resilient, while others liken the current environment to the dot-com bubble.
Galaxy Digital CEO Michael Novogratz believes the wave of new crypto treasury companies has likely hit its peak, with attention now shifting to which existing firms can scale and dominate.
Speaking during Galaxy’s Q2 earnings call, he said, “We’ve probably gone through peak treasury company issuance,” signaling a more competitive phase ahead.
The boom in treasury-based crypto firms was fueled by favorable U.S. regulations, with companies like Strategy, GameStop, Trump Media, and SharpLink allocating reserves to Bitcoin, Ethereum, and other digital assets.
However, Novogratz warned that saturation could make it harder for newcomers to gain traction, especially as Ethereum-focused treasuries like BitMine and SharpLink continue to expand.
According to a new report by 10x Research, retail investors chasing Bitcoin exposure through public companies like Metaplanet and Michael Saylor’s Strategy have lost an estimated $17 billion.
The firm said the losses stem from share premiums that once priced these companies far above the value of their Bitcoin holdings, premiums that have now evaporated.
