Volatility in the cryptocurrency market is exerting downward pressure on equity values of companies that have elected to hold bitcoin and other tokens on their balance sheets, intensifying scrutiny of the broader implications for the sector.
The cohort of publicly traded firms that began investing in cryptocurrencies with the expectation of price appreciation expanded rapidly last year. Many of these firms were encouraged by a crypto-friendly posture from U.S. President Donald Trump and by the high-profile example set by billionaire Michael Saylor’s Strategy, which originally operated as software company MicroStrategy and started accumulating bitcoin in 2020.
Recent market forces have shifted the playing field. Concerns about the valuations of artificial intelligence companies and uncertainty about the Federal Reserve’s timeline for rate cuts have weighed on risk assets generally, contributing to a slide in bitcoin to its lowest level since November 2024. That slide has translated into sharp falls in stocks of companies that identify themselves as "digital asset treasury" or DAT firms.
One of the most prominent examples, Strategy, has seen its shares fall from $457 in July to a low of $111.27 on Thursday, a level not seen since August 2024. On the same trading day Strategy was last quoted down by more than 11%.
In December, Strategy revised down its 2025 earnings outlook, attributing the move to a weak run in bitcoin. The company also announced plans to set up a reserve intended to support dividend payments. For the full year, Strategy said it expects to report earnings in a wide range - between a $6.3 billion profit and a $5.5 billion loss - compared with its earlier forecast of a net profit of $24 billion.
Other listed bitcoin buyers also experienced notable intraday declines. Shares of the UK’s Smarter Web Company fell nearly 18% on Thursday, while rival buyers Nakamoto Inc and Japan’s Metaplanet dropped almost 9% and more than 7%, respectively.
Bitcoin itself has slipped almost 20% since the start of the year, with selling intensifying after President Trump nominated Kevin Warsh as the next Fed chair - a development analysts have said could point to a smaller Federal Reserve balance sheet, which market participants view as negative for risk assets including cryptocurrencies. As a result, bitcoin has relinquished the gains it had amassed since the election of Trump, who on the campaign trail pledged to overhaul policies toward digital assets. The world’s largest cryptocurrency was last trading at $67,651.
"As Bitcoin continues its slide below the psychological barrier of $70,000, it’s clear the crypto market is now in full capitulation mode," said Nic Puckrin, investment analyst and co-founder of crypto analysis platform Coin Bureau. "If previous cycles are anything to go by, this is no longer a short-term correction, but rather a transition... and these typically take months, not weeks."
Beyond bitcoin, companies that have built treasuries around other tokens also saw share-price pressure. Alt5 Sigma, which announced last year it would stockpile the Trump family’s WLFI token, was down 8.4% on Thursday. SharpLink Gaming, a holder of ether, fell about 8%, and Forward Industries, which holds solana, declined nearly 6%.
Institutional investors can acquire tokens directly, but DATs have marketed themselves as an avenue for investors seeking regulated public company exposure to crypto and a levered path to potential token gains. The current decline in market value for these publicly traded crypto holders could make it more difficult for such companies to raise additional capital to buy more tokens - a central element of the business models for some of these firms.
Executives at these companies say their long-term success hinges on making prudent investment choices, and many are exploring ways to bolster shareholder value amid the market downturn.
Additionally, advertising content within market platforms continues to promote tools such as Fair Value calculators for investors assessing altcoins and stocks; one such promotion highlights a mix of 17 valuation models to estimate fair value for ALTS and other equities. The promotional copy suggests investors can use these models to search for undervalued stocks, though the ongoing market pressure on crypto-related treasuries presents a near-term headwind for valuation-driven investment narratives.
For DAT companies, the immediate consequences of a protracted crypto sell-off include heightened scrutiny of earnings forecasts, pressures on dividend-support plans and potentially more constrained access to fresh capital. How firms respond - through investment discipline, balance-sheet adjustments or alternative shareholder-return strategies - will be watched closely by investors and analysts.
Context note: The reporting above reflects the current market moves and company disclosures as described. It does not include additional external information or unspecified developments.