Companies that stockpile Bitcoin and other cryptocurrencies on their balance sheets have watched their share prices tumble in recent weeks as the digital asset frenzy that captivated investors throughout 2025 begins to cool. These firms, known as digital asset treasury companies, raise capital through stock sales or debt issuance specifically to purchase cryptocurrencies for long-term holding.
What to Know:
- At least 61 publicly traded companies have adopted Bitcoin treasury strategies, with shares now falling from summer peaks as crypto enthusiasm fades
- MicroStrategy shares dropped from $457 in July to $328 this week, while Japanese firm Metaplanet declined over 60% from its June high
- Analysts warn these companies offer leveraged exposure to crypto volatility, often declining four to five times more than Bitcoin itself during downturns
Treasury Strategy Backfires as Market Sentiment Shifts
Strategy (ex-MicroStrategy), led by Michael Saylor and considered the pioneer of corporate Bitcoin accumulation, exemplifies the sector's struggles. The company's stock fell from $457 in July to as low as $328 this week, marking its weakest performance since April. Despite the recent decline, shares maintain a 13% gain for the year.
Japanese Bitcoin treasury firm Metaplanet hit its lowest point since May this week. The stock has plummeted more than 60% from its June peak, though it remains up 105% year-to-date. Other companies that pivoted to Bitcoin strategies have experienced similar volatility.
UK-based website designer Smarter Web Company saw its shares soar after announcing a Bitcoin-buying strategy in April. The stock has since declined more than 70% from its June highs. Alt5 Sigma, which invested in Trump's World Liberty Financial crypto venture, has tumbled over 61% from its June peak reached before announcing a $1.5 billion deal with the venture.
The cryptocurrency treasury trend has expanded beyond Bitcoin to include Ethereum and other digital assets. Peter Thiel-backed BitMine and gaming media network GameSquare both announced Ether purchasing plans this year, sending their shares rocketing before subsequent declines of approximately 67% since July.
Analysts Warn of Leverage Risks and Market Dynamics
Kaiko analyst Adam McCarthy described the scale of reversal as "entirely unsurprising," noting these companies essentially function as volatility plays. When Bitcoin drops 3%, treasury companies often decline by multiples of that amount, sometimes four or five times as much due to their leveraged exposure.
"For retail users it's a shock a lot of the time, so it probably compounds the downturn when some sell out of fear," McCarthy said.
The analyst highlighted a concerning pattern where companies market crypto narratives to inflate equity values rather than genuinely investing in digital assets.
Market valuations for these firms can fall below the actual value of their cryptocurrency holdings during downturns. Digital asset treasury companies rely heavily on capital market access to fund their crypto purchases, which can "dry up when sentiment cools," according to Lale Akoner, global market analyst at eToro.
"Beyond their Bitcoin exposure, most companies have only modest fundamentals, so their valuations don't have much of a cushion," Akoner explained. This lack of underlying business strength leaves treasury companies particularly vulnerable to crypto market swings.
Understanding Digital Asset Treasury Companies
Digital asset treasury companies represent a relatively new corporate strategy where traditional businesses pivot to cryptocurrency accumulation as their primary value proposition. These firms typically operate by selling equity or issuing corporate debt to raise capital, then using proceeds to purchase and hold cryptocurrencies on their balance sheets. The strategy gained popularity as Bitcoin reached record highs throughout 2025, particularly after President Donald Trump's administration embraced the cryptocurrency sector.
At least 61 publicly listed companies that don't primarily engage in digital asset businesses have adopted Bitcoin treasury strategies, according to Reuters reporting from June. These companies range from established technology firms to smaller enterprises seeking to transform their business models through cryptocurrency exposure.
The treasury model creates leveraged exposure to cryptocurrency price movements, amplifying both gains and losses compared to direct crypto investment. When cryptocurrency prices rise, treasury company shares often outperform the underlying digital assets due to leverage effects and investor enthusiasm for crypto exposure through traditional equity markets.
Market Outlook Remains Uncertain
The recent downturn in treasury company shares reflects broader questions about the sustainability of crypto-focused business models. Retail investors, who drove much of the enthusiasm for these stocks, appear increasingly spooked by the volatility and are contributing to selling pressure.
Despite current challenges, the crypto exchange Gemini is set to debut on the Nasdaq Friday. The exchange, backed by Cameron and Tyler Winklevoss, raised its proposed price range for the U.S. initial public offering and targets a market valuation of up to $3.08 billion, suggesting continued institutional interest in cryptocurrency businesses.
Closing Thoughts
Digital asset treasury companies face mounting pressure as cryptocurrency market enthusiasm wanes and their leveraged business models amplify downside volatility. While some firms maintain year-to-date gains, the recent sharp declines highlight the risks of strategies that tie corporate valuations directly to crypto price movements.