The aggressive "Digital Asset Treasury" (DAT) model is facing its most severe stress test to date as February 2026 unfolds. Evernorth Holdings, one of the world's largest institutional holders of XRP, is currently weathering a staggering $380 million unrealized loss on its position of 473 million tokens. With an estimated average entry price near $2.40, the firm’s treasury has been squeezed by XRP's recent descent below the $1.50 mark. While this financial strain mirrors similar multi-billion dollar paper losses at BitMine (ETH) and MicroStrategy (BTC), emerging signals of a leverage "flush" on exchanges and positive developments within the Ripple ecosystem are providing a glimmer of hope for a structural reset.

Evernorth's $380M Squeeze: The Cost of Conviction

Evernorth's commitment to XRP as a primary treasury asset has placed the firm under significant financial pressure during the Q1 market downturn.

  • The Holding: Evernorth currently controls 473,276,430 XRP, representing approximately 0.473% of the total circulating supply. At current prices near $1.43, this stake is valued at roughly $684.7 million.

  • The Loss Waterfall: Following major purchases in late 2025 at significantly higher price points, the firm's unrealized losses have steadily climbed, surpassing the $380 million threshold this week.

  • Market Risk: Analysts warn that firms in this position may face difficulties raising new capital. In a worst-case scenario, if Evernorth or similar DATs are forced to liquidate assets for operating expenses, it could trigger a secondary wave of sell-side pressure across the altcoin market.

The Leverage Flush: A "Clean Slate" for XRP

Despite the treasury losses, derivatives data suggests that the market may be reaching a point of technical exhaustion.

  • Open Interest Collapse: XRP open interest on Binance has plummeted to just $405.9 million its lowest level since November 2024.

  • Organic Recovery Potential: This massive "flush" of leveraged positions reduces the likelihood of sudden price volatility caused by long or short squeezes. Analysts believe this "clean slate" is a prerequisite for a more organic, spot-driven recovery, as the drag from over-leveraged long positions has been effectively removed.

Strategic Catalysts: Ripple Prime and Permissioned Domains

XRP continues to attract positive retail sentiment, fueled by a series of foundational infrastructure upgrades.

  • Hyperliquid Integration: Ripple recently announced that its Ripple Prime institutional brokerage now supports Hyperliquid, bridging the gap between traditional finance and on-chain derivatives.

  • Permissioned Domains Launch: On February 4, the XRPL successfully activated Permissioned Domains (XLS-80), allowing institutions to operate credential-gated zones on the public ledger.

  • The Recovery Hurdles: While these developments improve long-term utility, Evernorth’s treasury remains under water. To reach the firm's $2.40 breakeven point, XRP would need to rally roughly 70% from current levels, a move that requires a broader return of global risk appetite.

Essential Financial Disclaimer

This analysis is for informational and educational purposes only and does not constitute financial, investment, or legal advice. Reports of Evernorth Holdings’ $380 million unrealized loss and its average entry price of $2.40 are based on technical analysis and market data as of February 5, 2026. Unrealized losses are "paper" losses and do not indicate realized capital depletion unless assets are sold. Digital Asset Treasuries (DATs) involve extreme risk, including potential forced liquidation during market downturns. The current leverage flush and infrastructure upgrades like XLS-80 are probabilistic signals and do not guarantee future price appreciation. Always conduct your own exhaustive research (DYOR) and consult with a licensed financial professional before making significant investment decisions in XRP or companies with large digital asset exposures.

Will the "clean slate" in the derivatives market lead to the 70% rally Evernorth needs to break even, or is the DAT model a "leverage explosion" waiting to happen?