Nasdaq is reportedly tightening the rules for digital-asset treasury companies.
The music has stopped. While traditional stocks and bonds are surging on the promise of an imminent Federal Reserve rate cut, the high-flying world of cryptocurrency is conspicuously refusing to join the party.
A brutal wave of selling has swept through the digital asset space, with the sharpest and most painful losses being inflicted on the very tokens and companies that have direct ties to President Donald Trump’s family.
The carnage has been swift and severe. Shares of ALT5 Sigma Corp., a treasury company for the Trump-linked DeFi project World Liberty Financial, slumped around 12 percent on Thursday and are now down more than 50 percent in the past week.
The project’s own WLFI token has been hit even harder, dropping about 25 percent and now down roughly 50 percent since its much-hyped Labor Day debut.
Even American Bitcoin Corp. — the mining outfit involving Eric Trump that just began trading — has not been spared, with its shares dropping by as much as 22 percent.
This targeted sell-off is being amplified by a growing sense that the regulatory tide is turning.
A new report from The Information on Thursday sent a chill through the market, revealing that the Nasdaq is now requiring some of the so-called digital-asset treasury (DAT) companies to receive shareholder approval before issuing new shares to buy more tokens.
This is a direct shot across the bow of a business model that has fueled the recent crypto boom.
Pioneered by MicroStrategy’s Michael Saylor, the strategy of issuing shares to fund massive coin purchases without taking on debt has been adopted by a flood of companies, many of them struggling firms that pivoted to crypto to save their businesses.
To date, a staggering 184 publicly traded companies have announced their intention to raise more than 132 billion dollars to buy various coins, according to Architect Partners.
The Nasdaq’s move, while seen as a prudent step to protect shareholders, threatens to choke off the very mechanism that has been driving the market higher.
“Full disclosure and an opportunity to have a say should be expected and demanded if not provided for. Yes, likely slows the pace of transaction velocity but perhaps a good thing,” said Eric Risley, founder of Architect Partners.
The pain is not confined to the Trump-linked ventures.
The broader market is feeling the chill, with treasury companies holding assets like Ether and Solana also seeing their shares drop, pulling down the prices of the underlying coins with them.
Bitcoin, the market’s bellwether, has fallen about 2 percent to around 109,800 dollars, a sign of a market that is actively de-risking ahead of a pivotal moment.
The latest US labor market data has only reinforced the view of a cooling economy, setting the stage for the Federal Reserve’s high-stakes meeting later this month.
“From macro perspective people are derisking a bit ahead of tomorrow’s employment data, which is a big economic data point ahead of Fed meeting later in month,” said Shiliang Tang, managing partner of Monarq Asset Management.
The party, it seems, is over, and the market is now bracing for the inevitable hangover.
