Karla Barker 
Market Downturn Hits Digital Asset Treasury Holdings
The recent crypto market decline has created significant challenges for companies holding digital assets as treasury investments. Since mid-October, the sustained downturn has triggered nearly $1 billion in liquidations within just one hour as Bitcoin fell below $82,000 on Friday morning. This situation has created a dual impact on these companies—their stock prices have declined alongside falling market sentiment, while their unrealized losses from crypto holdings have increased substantially.
Strategy, the company that pioneered the digital asset treasury approach, has seen its stock price decline over the past year. However, the firm remains optimistic, noting that its crypto holdings still represent $7.48 billion in unrealized gains. In a recent statement, Strategy claimed that at current Bitcoin levels, it has “71 years of dividend coverage assuming the price stays flat.” Interestingly, prediction markets suggest only a 6% chance that Strategy will sell any Bitcoin before year’s end.
Growing Unrealized Losses Across the Sector
Other major players in the digital asset treasury space haven’t fared as well. BitMine Immersion Technologies faces approximately $4.44 billion in unrealized losses on its Ethereum holdings. Metaplanet and SharpLink are down roughly $682 million and $695 million on their Bitcoin and Ethereum positions respectively. Galaxy Digital and Forward Industries also hold significant paper losses across their diversified crypto portfolios, which include Bitcoin, Ethereum, Solana, and Hyperliquid.
The declining valuations have compressed a key financial metric for these companies—their market-cap-to-net-asset-value ratios have fallen below 1. BitMine trades at 0.73x mNAV, while SharpLink and Forward Industries trade at 0.82x and 0.74x respectively. This suggests the market values these companies at less than the underlying assets they hold.
Operational Challenges and Future Outlook
Armando Aguilar, head of capital formation at TeraHash, described the situation as companies “living in two realities.” While paper losses have mounted and market caps have followed, most companies still have enough cash to continue operations for now. The critical question becomes sustainability if prices continue falling.
When mNAV falls below one, raising capital through equity offerings becomes more difficult, increasing pressure to find alternative liquidity sources. Aguilar explained that “when a company trades far below the value of the assets it holds, pressure slowly increases. Investors ask questions about whether the strategy makes sense at all.”
Forced selling becomes unavoidable only when companies can no longer fund operations or convince markets to support their long-term plans. While some digital asset treasuries approach this threshold, Aguilar noted that “the group overall hasn’t yet faced an immediate liquidation risk.” However, if multiple companies are pushed to sell, this could create steady downward pressure on crypto markets rather than a sudden shock.
Ultimately, recovery for these digital asset treasuries depends on resolving broader macroeconomic uncertainty. Such resolution would likely catalyze recovery in risk-on assets like Bitcoin, potentially improving investor sentiment and attracting capital back into the sector. For now, these companies navigate the challenging balance between paper losses and operational sustainability.