DAT Firms Sell Crypto to Save Their Stocks: Is This Sustainable?
FG Nexus offered $32.7 million in Ethereum to fund share buybacks after its inventory fell 94% in 4 months, highlighting the deepening web asset worth (NAV) disaster amongst digital asset treasury corporations.
The sale follows ETHZilla’s $40 million ETH offload in October, underlining mounting pressures all through a sector managing over $42.7 billion in cryptocurrency property. This wave of pressured promoting underscores vulnerabilities within the company crypto treasury mannequin, as corporations wrestle with shares buying and selling under the worth of their underlying asset holdings.
Treasury Companies Resort to Asset Sales Amid Stock Collapse
FG Nexus disclosed promoting 10,922 ETH in October to assist a $200 million share buyback. The firm started repurchasing shares after its inventory fell steeply under NAV, a measure of per-share underlying crypto worth. FG Nexus retained 40,005 ETH and $37 million in money, with complete debt rising to $11.9 million, as of Wednesday.
The agency purchased again 3.4 million shares at about $3.45 every, representing 8% of its excellent shares. Management harassed that shares had been bought at a reduction to NAV, which reached $3.94 per share by mid-November. This technique, nevertheless, required roughly $10 million in debt and a liquidation of 21% of ETH reserves in contrast to September ranges.
FG Nexus is one among a number of digital asset treasury corporations pursuing crypto gross sales. ETHZilla announced an approximate $40 million ETH sale to facilitate inventory repurchases in late October. The firm purchased 600,000 shares for practically $12 million since October 24, looking for aid from a persistent 30% low cost to NAV.
When a DAT firm’s shares commerce at a reduction to the worth of its crypto holdings (mNAV under 1.0), shareholders push administration to understand that hidden worth. The handiest method to do that is via a inventory buyback, however securing the funds crucial to repurchase shares requires money. If the corporate lacks adequate money reserves, it should promote a few of its crypto property to finance the buyback.
The mNAV of Metaplanet, a DAT firm that accumulates Bitcoin, dropped to 0.99 earlier than recovering to 1.03. Its shares have misplaced 70% since their June highs, signaling sector-wide stress. The use of perpetual most well-liked fairness, which blends mounted dividends with crypto publicity, additional complicates capital buildings already beneath strain from present market circumstances.
Leveraged Structures Amplify Market Pressure
DAT corporations deployed $42.7 billion in crypto throughout 2025, with $22.6 billion amassed in Q3 alone. This growth accelerated as Bitcoin rallied above $126,000 in October, fueling constructive suggestions loops and rising valuations. However, subsequent reversals uncovered weaknesses in capital buildings constructed on leverage and capital market entry.
Treasury corporations account for under 0.83% of complete crypto market capitalization. Their focus of holdings, nevertheless, amplifies their influence throughout downturns. Leverage through convertible notes, PIPE offers, and perpetual most well-liked fairness will increase promoting strain when costs fall or NAV reductions widen.
Market liquidity deteriorated sharply as asset costs dropped. Bitcoin’s order e book depth on the 1% band fell from $20 million to $14 million—a 33% lower that heightens value sensitivity to any promoting. Analysts estimate pressured treasury firm gross sales may attain $4 billion to $6 billion if 10% to 15% of positions are liquidated, doubtlessly surpassing November’s $2.33 billion in ETF outflows.
Systemic Risks Mount as Buying Halts
Corporate crypto shopping for has stalled due to waning confidence and diminished capital deployment. Companies that after provided regular demand at the moment are promoting, reversing earlier constructive cycles. MicroStrategy’s inventory fell 60% amid Bitcoin volatility, displaying the chance of correlation between crypto costs and fairness values even for corporations with strong steadiness sheets.
Smaller treasury companies are beneath elevated stress, particularly these holding much less liquid property. Several companies uncovered to Solana skilled 40% NAV drawdowns as concentrated bets deepened losses. Limited diversification and skinny buying and selling volumes in various cryptocurrencies add to broader sector vulnerabilities.
Retail traders additionally contributed to promoting by exiting positions upfront, decreasing market demand as institutional holders started liquidating. In November, $4 billion in ETF outflows and diminished market-maker exercise intensified volatility. These circumstances resemble leverage-fueled market crashes seen in different asset courses, such because the 2008 mortgage REIT disaster.
This rising disaster challenges the resilience of the digital asset treasury mannequin in extended downturns. Rigorous danger administration and regulatory oversight may very well be crucial to stop self-reinforcing selloffs from destabilizing the broader market. In the weeks forward, these corporations’ means to preserve their crypto holdings with out additional pressured liquidation will decide whether or not the sector survives intact or undergoes basic restructuring.
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