Cryptocurrency Crash Triggers Chain Reaction: "Digital Asset Treasury Company" Hit Hard, Stock Prices Plummet

Once, accumulating cryptocurrencies was the “secret weapon” used by obscure companies to boost their stock prices. Now, this strategy has become a heavy burden dragging down market capitalization.

Data shows that over the past year, the median stock price of so-called “digital asset bond companies” has plummeted by 62%, far exceeding Bitcoin’s sharp correction. This has caused many of these companies’ stock prices to fall below their net asset value of holdings—meaning that if these companies were liquidated, shareholders might receive more than their current stock value.

This stands in stark contrast to the peak of the DATs frenzy: at that time, a company holding $100 million in Bitcoin could have a market value of $150 million or even $200 million. Even the pioneer of this strategy, Michael Saylor’s Strategy Inc. (MSTR.US), saw its stock price cool off as the crypto boom and coin prices waned. Currently, its market value is only 9% above the value of its Bitcoin holdings—far below the peak premium of over 300%.

“Since 2020, we’ve seen meme stocks, tokens, SPACs, and other speculative bubbles emerge one after another,” said Michael Leibowitz, portfolio manager at RIA Advisors. “Digital asset bond companies are just another speculative bubble, and that bubble is reflected in the premium, which has now collapsed.”

According to data, the median return of listed digital asset bond companies in the US and Canada this year has fallen 20%, while the median return of S&P 500 components has risen 5%.

Facing ongoing pressure, Theodore Shablin, an analyst at B. Riley Securities, believes DATs no longer attract investors. “This was just a short-term hype, and then investors began to realize that to justify a stock price above the underlying crypto assets, the company must generate excess returns.”

Since Bitcoin itself does not generate income, those DAT companies with weak stock prices and maturing debt now have to sell their crypto holdings for extra cash—something previously unimaginable.

Bitcoin bond company Empery Digital Inc. (EMPD.US) announced on Monday that it has begun selling Bitcoin to buy back discounted shares. In December last year, Peter Thiel-backed Ethereum bond company ETHZilla Corp. also announced the sale of $74.5 million worth of tokens to pay off debt.

Strategy Inc.'s stock has fallen 30% year-to-date. On Wednesday, Canaccord Genuity sharply cut its target price by 61% due to Bitcoin price declines and narrowing premiums. The firm reported a net loss of $12.4 billion in Q4, mainly due to the decline in Bitcoin value.

While some DATs like Strategy, backed by strong balance sheets, can withstand the current downturn, others are seeking new ways out. In 2025, Strive Inc., a Bitcoin bond company founded by former Republican presidential candidate Vivek Ramaswamy, agreed to acquire its competitor Semler Scientific Inc. Generally, DATs raise funds by issuing debt or securities to buy cryptocurrencies. In the context of persistently low coin prices, smaller companies in this space may face default risks if they are not acquired by larger firms.

Despite the rapid collapse of prices and premiums for DATs, Leibowitz from RIA is not surprised. “If you want to hold Bitcoin, just hold Bitcoin. I think investors are finally starting to see that clearly,” he said.