Crypto-hoarding treasury firms are becoming a market risk as the 2026 rout deepens

Yesterday’s sharp move in Bitcoin did not happen in isolation. The slide from $70,000 into the mid-$60,000s, driven by heavy ETF outflows, marked a shift in tone across risk assets. The selling was broad, fast, and unforgiving — a reminder that liquidity has become fragile again.

What followed was more revealing. As crypto prices continued to fall, a separate trade that had quietly powered last year’s rally began to unwind in public view. Public companies that tied their balance sheets directly to digital assets are now facing the same volatility as the tokens they hold, with far less room to maneuver.

That shift has turned a once-celebrated strategy into a growing source of risk.

Bitcoin’s Worst Selloff Since FTX Is Exposing the Fragility of Crypto Treasury Firms

Bloomberg framed the change clearly: “Crypto-hoarding treasury companies, which helped turbocharge a digital-asset rally in last year’s first nine months, are now at risk of sparking market contagion as selling pressure mounts. Publicly traded digital-asset treasuries, or DATs, have operated on the premise that accumulating specific cryptocurrencies would generate sustained stock market premiums. With the crypto market enduring its worst selloff since the aftermath of FTX’s collapse, the cracks in that narrative are starting to show.”

That premise powered a new class of public companies over the past year. It is now being stress-tested by falling prices, shrinking liquidity, and a market reassessing risk, all at once.

DATs are publicly traded firms that shifted large portions of their corporate treasuries into crypto, most often Bitcoin. The pitch was simple. Hold a volatile asset with upside potential, attract investor attention, and trade at a premium to the value of the underlying coins. That premium became a form of financial leverage, allowing firms to raise capital through equity and add more crypto to their balance sheets.

The approach gained momentum in 2025 as Bitcoin surged. Treasury-heavy firms became magnets for speculative capital. Their stocks climbed faster than the assets they held. The trade fed on itself. Rising share prices made new issuance easier. New issuance funded more accumulation. Demand rose across the system.

At the peak in October, Bitcoin crossed $126,000. That moment now reads less like a milestone and more like a turning point.

Bitcoin has fallen close to 50% from that high. Prices briefly touched $63,295.74 before settling near $63,525, logging a 12.6% one-day drop, the steepest since November 2022. Weekly losses reached 17%. The year-to-date drawdown sits near 28%.

The broader crypto market has lost roughly $2 trillion since early October, with about $800 billion erased in the past month alone. Ether has taken heavier damage, sliding more than 13% in a day to $1,854, with year-to-date losses nearing 38%.

Liquidations followed quickly. Roughly $1 billion in Bitcoin positions vanished in a single day as part of a multi-day $2.56 billion wipeout, according to a report from Reuters. Thin weekend liquidity magnified the move, leaving little room for orderly exits.

Several forces collided at once. Earnings from major AI players disappointed traders who were already uneasy about stretched valuations. Microsoft’s Azure growth met expectations rather than beating them, triggering a double-digit drop in the stock and rippling across tech. Political signals added pressure. The nomination of Kevin Warsh as Federal Reserve chair raised fears of tighter monetary conditions and a smaller balance sheet. Even traditional havens cracked. Gold suffered its sharpest daily fall since 1983. Silver posted the worst single session on record.

In that environment, crypto lost its footing. DATs lost it faster.

When Crypto Treasuries Crack: Why Hoarding Firms Are Amplifying the Selloff

Shares of crypto-hoarding firms have fallen by a median 62% over the past year, far worse than Bitcoin’s 20% decline. Many now trade below the net asset value of the crypto they hold. That pricing sends a blunt message. Equity investors place greater value on liquidation than on continuation.

Strategy, the firm most closely associated with the treasury playbook, shows the scale of the reversal. Its stock dropped from $457 in July 2025 to $111.27, the lowest level since August of the prior year. One session erased more than 11%. In December, the company cut its 2025 outlook, warning of a possible swing from profit to a $6.3 billion loss tied directly to Bitcoin weakness. Plans to reserve cash for dividends added another layer of strain.

Elsewhere, the damage looks similar. Smarter Web Company in the UK fell nearly 18% in a day. Nakamoto Inc. slid close to 9%. Metaplanet in Japan dropped more than 7%. The pain spread outward. Coinbase, Circle, and Robinhood all declined as investors pulled back from crypto-linked exposure.

Analysts describe a tightening loop. Falling stock prices limit DATs’ ability to raise capital. Limited capital cuts off a source of demand that helped lift prices during the rally. Lower prices feed back into weaker equity valuations. At a certain point, selling becomes the only option.

That risk worries traders watching discounts widen across the sector. If capital markets shut their doors, forced sales could accelerate losses and spread stress into exchanges, lenders, and ETFs.

On X, the tone has shifted from celebration to caution. Some users describe DATs as leveraged trades dressed up as operating companies. Others predict many will disappear in 2026 as index providers reconsider inclusion and passive funds unwind positions. Altcoin-focused treasury vehicles draw even harsher criticism, with warnings that aggressive yield-chasing launches could end badly.

The impact has not been confined to U.S. markets. Crypto-linked equities and retail activity in Europe and Canada moved in step, underscoring how tightly global crypto participation, including crypto gaming and Canadian gambling markets, now tracks periods of volatility.

Professional investors sound equally guarded. Nic Puckrin of Coin Bureau describes the market as entering a prolonged transition rather than a brief correction. Deutsche Bank points to persistent ETF outflows, more than $3 billion in January alone, following heavy redemptions late last year. Julius Baer’s Manuel Villegas Franceschi flags concern around tighter policy expectations under a new Fed chair. Jefferies strategist Mohit Kumar warns that miner liquidations and retail-heavy ownership amplify downside risk.

The data support that caution. Bitcoin’s correlation with equities has climbed from 0.15 in 2021 to roughly 0.75 in 2026. The asset that once marketed itself as a hedge now trades like a high-beta risk play tied to liquidity conditions.

For DATs, the question runs deeper than price. The treasury-first model depends on confidence in rising assets and easy access to capital. That environment no longer exists. Survival may require a pivot toward operating cash flow, real revenue, and balance sheets that can weather drawdowns. Some firms will adapt. Others may not.

This episode offers a clear lesson. Crypto treasuries magnified gains during the upswing. They magnify losses on the way down. The ripple effects now reach beyond tokens into stocks, ETFs, and market structure itself.

Investors tracking the next move are watching two signals closely: ETF flows and Federal Reserve messaging. Until those stabilize, the pressure on crypto-hoarding firms is unlikely to ease.