The sustained downturn in the cryptocurrency market since mid-October has had a major impact on digital asset government bond stocks and their holdings, with the recent selloff causing nearly $1 billion in liquidations in an hour. Bitcoin By Friday morning, it was below $82,000.
The decline in the cryptocurrency market has had a double impact on digital assets government bonds. The stock prices of these major listed companies plummeted due to the decline in market sentiment. Furthermore, unrealized losses from holding virtual currencies are rapidly increasing.
Shares of Strategy, the company that invented the digital asset treasury playbook, have soared over the past year. Still, the company’s unrealized gains on cryptocurrencies amounted to $7.48 billion. In a tweet on Friday, the company struck an optimistic note, saying that current Bitcoin levels would “cover 71 years of dividends, assuming the price stays the same.”
Owned by Prediction Market Myriad decryptionFor Dastan’s parent company, users place just a 6% chance that the strategy will sell its Bitcoin holdings by the end of the year.
Other major companies with DAT playbooks have also seen significant increases in unrealized losses on cryptocurrencies over the past month or so.
BitMine Immersion Technologies is a prime example. According to Bitmine Tracker, the company has unrealized losses on its Ethereum holdings of approximately $4.44 billion. Metaplanet and SharpLink lost approximately $682 million and $695 million, respectively. Bitcoin and Ethereum According to CoinGecko data, each holding amount. Galaxy Digital and Forward Industries also own Bitcoin, Ethereum, SolanaHyperliquid.
These sharp drops in DAT’s valuation have compressed key financial metrics, pushing the market capitalization to net asset value (mNAV) ratio below 1.
BitMine (BMNR) is trading at 0.73x mNAV, while SharpLink and Forward Industries are trading at 0.82x and 0.74x, respectively.
“Digital asset government bonds currently live in two realities,” said Armando Aguilar, head of capital formation at global Bitcoin yield protocol TeraHash. decryption. “On paper, the value of their holdings has fallen precipitously, and market capitalization has followed suit. In reality, most of these companies are still able to continue operating because they have enough cash to cover their operations, at least for now.”
The key question is how sustainable this position is if prices continue to fall. When mNAV falls below 1, it becomes difficult for companies to issue stock to raise cash, increasing pressure to find other sources of liquidity, experts said. decryption In a previously published report.
“When companies trade well below the value of their assets, the pressure builds over time,” Aguilar explained. “Raising new capital is becoming increasingly difficult as investors question whether the strategy even makes sense at all.”
“Forced sales are only inevitable when a company is unable to finance its operations or persuade the market to support its long-term plans,” Aguilar said. The analyst tempered his view by adding that while some DATs are nearing that point, “the group as a whole does not yet face any immediate liquidation risk.”
However, if multiple DATs are forced to sell, the impact would extend beyond their respective balance sheets, creating a “steady source of downward pressure” on the crypto market, Aguilar said, “rather than a sudden shock.”
The ultimate recovery of these DATs will depend on the resolution of macro uncertainties, experts previously said decryption. If such a scenario materializes, it could facilitate a recovery in risk-on assets, including Bitcoin, improve overall investor sentiment and attract capital inflows.
