The latest turbulence in cryptocurrency markets is severely impacting so-called "treasury" companies that have been accumulating Bitcoin and other digital assets on their balance sheets, amplifying investor concerns about this niche but rapidly growing sector. Recent data shows 15 Bitcoin treasury firms now trade significantly below the net asset value (NAV) of their crypto holdings, with Strategy Inc. (MSTR.US)—dubbed the "Bitcoin whale" and "Bitcoin shadow stock"—seeing its shares plunge nearly 36% in November alone.
This year witnessed a surge in publicly listed companies allocating corporate cash flows to cryptocurrencies, fueled by former U.S. President Donald Trump's crypto-friendly stance, Congressional support for stablecoin ecosystems, and the meteoric rise of Michael Saylor-led Strategy's market capitalization. However, as Bitcoin prices tumbled over 30% from all-time highs, dipping below $90,000 into bear market territory, Strategy—once hailed by Wall Street as "the most successful investment bank in financial history"—has suffered disproportionately, with shares collapsing over 60% since July peaks.
Most treasury firms emulate Strategy's long-term Bitcoin accumulation strategy. After peaking in November last year, Strategy's stock has cratered over 70%, evaporating the premium that once made it a darling of momentum traders and crypto investors. Still, the shares remain up approximately 1,300% since Saylor first announced Bitcoin purchases in August 2020—outperforming all major stock indices during this period.
The selloff has extended to Strategy's newer financing instruments. Its perpetual preferred shares—cornerstones of Saylor's recent strategy—have plunged, exposing how heavily the business model relies on sustaining crypto enthusiasm and retail investor confidence. Meanwhile, potential exclusion from MSCI and Nasdaq-100 indices threatens to erase its storied status.
With the crypto market shedding over $1 trillion in November, Strategy's mNAV (enterprise value-to-Bitcoin holdings ratio) has collapsed to just above 1.1—signaling the breakdown of its virtuous cycle where stock issuance at premiums to NAV amplified Bitcoin exposure. Analysts at Standard Chartered noted in September that DAT firms, holding 4% of all Bitcoin and 3.1% of Ethereum, could significantly influence broader crypto prices, predicting industry consolidation.
As the Bitcoin DAT space becomes overcrowded, newcomers are diversifying into altcoins. Companies like Bitmine (BMNR.US) and Sharplink Gaming (SBET.US) have expanded into Ethereum, which offers staking rewards unlike purely appreciation-dependent Bitcoin strategies. However, Ethereum DAT stocks have retreated sharply from 2025 highs after initial surges.
Smaller players are venturing into more volatile altcoins like Solana and XRP, with micro-caps even speculating on meme coins like Dogecoin. ALT5 Sigma (ALTS.US), for instance, has aggressively accumulated tokens from the Trump-affiliated World Liberty Financial project. Such moves introduce heightened volatility risks compared to established crypto assets.