Crypto treasury companies are increasingly under financial pressure after Bitcoin and Ethereum fell nearly 30% in a week, wiping out around US$25 billion in unrealized value on digital asset balances.
Data monitoring public crypto treasury companies shows that currently none have assets above their average purchase price. This sharp decline has caused most treasury strategies to enter the loss zone simultaneously, raising concerns about liquidity, funding, and long-term sustainability.
This massive sell-off is hitting companies with significant treasury holdings simultaneously.
Large holders are recording the biggest losses on paper, dragging unrealized profit-loss accumulation sharply into negative figures. These losses are indeed unrealized, but their scale is significant as they cause weakening in the company's balance sheet and equity valuation.
Therefore, the market is now shifting from appreciating cryptocurrency asset accumulation to assessing survival risk.
Market Premium Has Plummeted
One of the main pressure signals is the plummet in market net asset value (mNAV), which compares the company's equity valuation with the value of the cryptocurrency they hold.
Several large treasury companies are now trading below mNAV 1, which means the market assesses their equity lower than the value of the assets they hold. This makes it impossible for them to raise capital through stock issuance without causing ownership dilution.
MicroStrategy, one of the largest corporate Bitcoin holders, is also trading below its asset value despite having cryptocurrency assets worth billions of US$.
The discount limits MicroStrategy's flexibility to buy more assets or refinance at low costs.
Unrealized losses alone do not directly lead to bankruptcy. Risk increases if asset prices fall along with high leverage, debt maturities, or continued cash burn.
Mining companies and treasury vehicles that rely on external funding have the highest exposure to risk. If cryptocurrency prices remain sluggish, lenders may tighten requirements, equity markets may remain closed, and refinancing options become increasingly limited.
This condition creates a feedback loop. Falling prices lead to reduced equity values, which narrow access to capital and add pressure to the company's balance sheet.
Stress Phase, Not A Collapse
The current decline reflects forced deleveraging and increasingly tight financial conditions, not due to the failure of the cryptocurrency itself.
However, if prices fail to rebound and capital markets remain tight, the pressure could become even heavier.
For now, cryptocurrency treasury companies remain solvent. However, the room for error is becoming increasingly narrow.