From "Infinite Bullets" to "Stealth Bombs": DAT Treasury Company has slowed down its purchases, but 85% of the market capitalization is still greater than the coin holding market capitalization.

Author: Frank, PANews

Reprint: White55, Mars Finance

In the frenzy of the cryptocurrency market, “Digital Asset Treasury Company” (DAT Company) plays the role of an “infinite ammunition depot,” absorbing huge amounts of capital from traditional markets through innovative financial instruments, continuously “blood transfusing” the crypto ecosystem. However, as the market boom fades, recent trends have remained sluggish, and these once “buyers” are facing severe tests. Can they continue to support the market? Or will they transform from a “blood transfusion pump” to an “invisible bomb” due to their inherent structural risks, becoming an “accelerator” that amplifies market declines?

DAT company's stock price plummeted, with asset purchases dropping by 95%.

According to BBX data, the number of publicly listed companies with crypto treasury has reached 248, of which 187 companies hold Bitcoin. The number of listed companies holding Ethereum is 42, and the number holding SOL is 20. As of November 6, many DAT companies' stock market values have fallen significantly below their NAV. Among those holding BTC, 15 companies have mNAV below 1, and 5 companies holding ETH have mNAV below 1, with a total of 37 companies having mNAV below 1, accounting for approximately 14.9% (mNAV = Market Capitalization / Value of Holdings), which means about 85% of crypto treasury companies have a market value greater than the scale of their held crypto assets.

From the perspective of market capitalization, companies that hold BTC in reserve have the largest size, with total assets of 41.78 billion USD. Therefore, the performance of this portion of DAT enterprises is also more representative. PANews has compiled the performance of 34 non-mining listed companies with holdings exceeding 100 BTC listed on SoSovalue over the past three months.

Overall, the average price fluctuation of these listed companies in the past three months is -24.51%, with only 5 companies experiencing an increase in their stock prices within that period. The remaining companies are all in a declining state. Among them, Next Technology had the largest decline, with a drop of over 95% in three months. During these three months, these companies experienced some decent increases, with an average maximum increase of 49%, and 6 companies had a maximum increase exceeding 100% during this period.

However, the decline after the rise is equally exaggerated, with these companies experiencing an average pullback of 51.8%.

In contrast, the BTC price during the same period experienced a 14% decline, with the largest pullback being 21%. Clearly, the volatility of these crypto treasury companies is stronger, with both increases and decreases being more exaggerated than BTC's movements.

Overall, as the recent trend in the crypto market has been weak, these crypto treasury companies are generally more sluggish. Taking the absolute leader Strategy as an example, in July this year, Strategy's stock price reached a high of $455, but as of November 4, its stock price had fallen to a low of $246, representing an overall decline of 45.9%. This trend is continuing, and there seems to be no signs of a rebound in the near future.

The decline in stock prices reflects the market's pessimism towards DAT-themed companies. From the perspective of investing in Bitcoin, a large number of enterprises have a BTC holding cost that is higher than the current spot price. For example, as of November 6, the current price of BTC is approximately $102,900. There are 23 companies whose holding costs exceed this price. However, since most of these enterprises are newly established DAT companies, their overall proportion is not high. The Strategy with the highest proportion has an average cost of $74,000, which still leaves a substantial profit margin.

In addition, as prices decline, the buying pace of these crypto treasury companies has also gradually slowed down. According to data from Blockworks, the total cryptocurrency purchases from October 27 to November 2 amounted to approximately $342 million, a decrease of 95% compared to the peak week of $7.39 billion. The ETF data during the same period also showed a similar trend.

From this perspective, the traditional financial market's ability to supply funds to the crypto market is more inclined to be a bonus rather than a timely assistance.

Who will “dump the market”? The potential liquidation risks of three DAT treasury models.

The general concern in the market is that DAT companies may panic sell due to “losses”. It is actually difficult to answer this question with a single standard answer, as these DAT companies differ completely in terms of financing methods, debt design, or asset management strategies. However, PANews has selected three relatively typical models for analysis to address whether these DAT enterprises might pose a risk of dumping during a market downturn.

First of all, the most typical one is Strategy (MSTR), and the strategy of Strategy is “permanent accumulation” of Bitcoin.

Over the past five years, Strategy has raised a total of $7.27 billion by issuing various “convertible notes.” These notes are typically zero-coupon or have very low interest rates, making their financing appear almost “free.” In this process, investors accept zero interest not because they are betting on the company's profits, but rather on the embedded “stock call options” in the notes — the right to convert the bonds into high-priced MSTR shares in the future. Therefore, essentially, the issuance of Strategy's convertible notes is more like the issuance of an option product; for investors, once Bitcoin rises, they will convert these notes into company shares to enjoy the benefits.

However, it is worth noting that when the price of Bitcoin continues to decline, investors will not choose to “convert” their stocks. Instead, they will exercise the hidden “put option” in the bond terms (Put Option)—i.e., at the bond's maturity, requesting Strategy to repay 100% of the cash principal. In the case of insolvency, the only option left for Strategy will ultimately be to sell Bitcoin.

However, the maturity dates of these bonds are basically between 2028 and 2030. As long as the price of Bitcoin during that period is significantly higher than the current price, these bonds are likely to be converted into stocks. In addition, Strategy has also designed a mechanism whereby if the price rises but the stocks are not converted, the company has the right to redeem these bonds at face value (plus interest), which is also a way to indirectly prevent potential declines.

Overall, companies like Strategy or those adopting similar mechanisms are unlikely to sell their held crypto assets in the short term.

Of course, Strategy is a well-known publicly listed company in the entire cryptocurrency market, and its appeal allows it to maintain strong financing capabilities even under extremely harsh conditions. In contrast, some other emerging DAT companies can only resort to certain tactics.

Taking Sonnet BioTherapeutics as an example, this original biopharmaceutical company underwent a “reverse merger” led by crypto-native VCs such as Paradigm, Pantera, and Galaxy Digital. It adopted a method similar to “backdoor listing.”

These VCs are using a struggling biotech company (SONN) as a “shell,” injecting $888 million worth of HYPE tokens and cash, transforming it into a pure HYPE treasury listed on Nasdaq (renamed Hyperliquid Strategies Inc., HSI). As of now, this acquisition has not been completed.

The potential risk for this company lies in the announcement of the acquisition deal on July 14, 2025. On the same day, Bitcoin reached an all-time high of $123,000, while the HYPE token also hit a historical high of $49.75 (which later rose to $59). This company was born at the peak of market euphoria, making its balance sheet extremely vulnerable during the market correction.

As of November 5th, the price of HYPE has fallen to $39.7. As a Nasdaq-listed company, the new FASB rules require it to report the unrealized losses resulting from the decline in HYPE's price in its quarterly financial reports. The massive paper losses may scare off traditional investors, leading to a collapse in stock prices and cutting off its financing channels.

This could trigger a chain reaction, as aggressive hedge funds may find arbitrage opportunities when the market value of its stock price is significantly lower than the net value of the assets held: buying HSI stocks cheaply on the open market, and then leveraging shareholder rights to initiate a proxy battle, forcing the company to liquidate its entire HYPE treasury and distribute the cash proceeds (which exceed the net asset value of the stock price) to shareholders.

From this perspective, shell companies like this, combined with unstable crypto assets, may face the outcome of being sold off.

There is also a type of enterprise that directly states in its operational rules that selling off will become part of the game rules. Taking TONX (, which was formerly VERB Technology), as an example, this publicly listed company was restructured into TON Treasury Company through a massive $558 million PIPE (Private Investment in Public Equity) financing, supported by institutions such as Kingsway Capital, Pantera, and Kraken. Among its design, there are such rules:

If the TONX stock price is higher than NAV (premium), the company will issue additional shares to purchase more TON.

If the TONX stock price falls below NAV (at a discount), the company has authorized a stock buyback program of up to $250 million.

Currently, the company's mNAV is 0.495, indicating that it is at a discount level. Once the stock buyback plan is activated, the current cash of only $67 million is insufficient to support a $250 million buyback, which directly results in the necessity to sell TON assets. Once this step is taken, it will lead to a vicious cycle where the price of TON declines, and the stock price of TONX may also be affected. Even a buyback may not restore market confidence.

In summary, it seems that there is no perpetual upward flywheel in this world. The DAT company, which appears to have unlimited resources, also has many hidden dangers behind its mechanisms. Moreover, many public chain foundations seem to be adopting similar models to amplify leverage.

“Bull Market Accelerator” is also a potential driver of the “Bear Market Downward Spiral”.

So, in times of market skepticism, we must ask a question: Is the rise of DAT Company merely a fleeting frenzy at the end of a bull market, or is it a source of funding with lasting potential for the crypto industry?

From the perspective of short-term market performance, even though the pace of entry has slowed down, these DAT companies remain a relatively stable source of fresh blood in the crypto market, and under normal circumstances, these enterprises will not easily sell their held crypto assets. In some altcoins, the holdings of DAT companies have already exceeded 5% of the total market value or even more.

These companies have injected hundreds of billions of dollars from traditional capital markets into the cryptocurrency ecosystem. They are one of the largest and most concentrated groups of buyers in the market.

However, due to the varying motivations and rule designs of these enterprises, these DAT companies are also relatively unstable sources of funding. In a bull market, they serve as perfect “bull market accelerators.” They leverage the advantages of traditional financial markets' leverage and regulation to continuously attract funds, effectively driving up the market.

In a bear market, these companies may be forced to liquidate due to their debt covenants, corporate charters, and shareholder demands. Although the probability of such events occurring is low, once they do happen, they inevitably become an “accelerator” of the “death spiral” that amplifies systemic risk.

Of course, even though the current market sentiment is quite pessimistic, the objective reality is that the “black swan” has not yet arrived. As for the DAT treasury strategy business model, everything is still in the early stages, and the final results still need to be tested by the market and time. Perhaps, after this round of market correction, DAT companies will become the new driving force for the next round of growth.