Strategy, the bitcoin-accumulating public company led by Michael Saylor, has drawn renewed attention after authorizing additional bitcoin sales as part of a package that also includes a share repurchase program. Announced late last month and greeted with analyst praise, the plan permits up to $1.25 billion in bitcoin sales and coincided with a brief uptick in Strategy's shares on Friday.
The company has not been idle this year: it has already liquidated roughly $218 million of bitcoin to finance dividend payments and to rebuild its U.S. dollar cash reserves. Strategy's equity rallied sharply in late 2024 and through much of last year, but by last month the stock had declined to two-year lows, reflecting a broader retrenchment in market sentiment toward publicly traded crypto treasuries.
Those firms, commonly referred to as digital asset treasury or DAT companies, became prominent in the previous year amid strong investor enthusiasm. The DAT model offers a regulated equity route for investors to gain exposure to cryptocurrencies, and many have emphasized the potential to amplify returns through access to equity and debt markets. However, the reliance on rising token prices and on the premise that shares will trade above net asset value has exposed a structural vulnerability when markets turn.
Bitcoin, the most widely held token among DATs, has weakened significantly this year, at one point falling as much as 33%. Market participants have attributed the selloff to several concurrent pressures cited in company discussions: heightened geopolitical tensions, sharply higher oil prices and a Federal Reserve policy shift under new chair Kevin Warsh. As those forces weighed on the crypto complex, the fortunes of many DATs deteriorated in step with token markets.
Several metrics illustrate the scale and timing of the DAT sector's reversal. Market capitalizations for these companies reached a peak in July of last year when the broader crypto market's value climbed to about $4 trillion. By November, however, global trade worries sparked heavy liquidations across crypto markets, including a single-day $19 billion liquidation event. Since that trough, DAT market capitalizations have not mounted a sustained recovery through 2026 while the crypto market has remained sluggish.
Another key indicator is the relationship between DATs' market value and the net asset value of the tokens they hold - a measure commonly called mNAV. During the market's upcycle, many DATs traded at premiums to the underlying crypto holdings, reflecting investor belief that public equity access could be used to source additional token purchases. Starting late last year, aggregate mNAV across the group slipped below 1, indicating these companies were trading at discounts to the value of their crypto holdings. That inversion is significant because most DATs depend on share prices exceeding net asset value to attract new equity investors and to sustain leveraged strategies.
Strategy itself saw its mNAV fall beneath 1 for the first time late last month. Company executives have argued that their ability to generate shareholder value will depend on disciplined capital allocation and investment decisions. In the near term, several firms in the sector have sought to bolster returns and investor confidence by pursuing corporate actions such as share repurchases and limited asset sales.
Trading activity in DAT shares has also been uneven. Aggregate weekly volume across the group peaked in August of last year, based on data from a blockchain data provider, but then swung sharply and reached a low in February when markets reacted to the nomination of Warsh for the Fed chair. Analysts cited expectations that Warsh would focus on reducing the Federal Reserve's balance sheet as a headwind for risk assets, including cryptocurrencies, because tighter balance-sheet policies could reduce liquidity available to markets.
Among the public players, Strategy maintains the largest crypto inventory even after its partial sales this year. BitMine Immersion Technologies ranks second in holdings, primarily of ether, the largest token after bitcoin. Other treasury-centric companies have also trimmed positions: Nakamoto Inc, which styles itself a bitcoin operating company, sold roughly 5% of its bitcoin stash in March and then another roughly 600 bitcoin in June. Requests for comment to the firms cited in these developments were either declined or went unanswered.
Summary
Strategy's authorized sale program and share buyback revived investor focus on the DAT sector's fragility. The company has monetized about $218 million of bitcoin this year to support dividends and cash reserves. As bitcoin has fallen up to 33% amid geopolitical strains, elevated oil, and a Fed policy shift, many public crypto treasury companies have seen market capitalizations and trading dynamics deteriorate, with mNAV readings turning negative for some.
Key points
- Strategy approved up to $1.25 billion in bitcoin sales and launched a share repurchase plan; analysts responded positively and the stock briefly rose.
- DAT market capitalizations peaked in July last year and declined after a record liquidation event in November, with no full recovery through 2026.
- Token prices, particularly bitcoin, have fallen as much as 33% this year, putting pressure on companies that hold large crypto treasuries and depend on share premiums to fund growth.
Risks and uncertainties
- Falling token prices can erode the net asset value of DATs' holdings, hurting balance sheets and investor perception - this directly impacts companies holding large crypto inventories.
- A market environment where DAT shares trade below the value of their crypto holdings makes it more difficult to raise new equity or attract leveraged capital, constraining fundraising for these firms.
- Macro and policy developments, such as a Fed policy focused on reducing the central bank balance sheet, may tighten liquidity for risk assets and further pressure crypto-linked equities.
Companies referenced in this report did not provide comment or did not respond to requests for comment.