When the leverage of crypto companies becomes a deadly trap

Bitcoin has lost almost 27% from its peak of $126,000, now settling around $92,000. A correction that for crypto companies is not simple volatility, but a real perfect storm. Companies that built their model on leverage are now in a critical situation: disintegrating economic models, decimated portfolios, and margins squeezed to the minimum.

The fragile architecture of the DAT model

Crypto companies have built in recent months a strategy that seemed infallible: the DAT (Digital Asset Treasury) model. The basic concept is elegant—issuing shares at a premium over the value of the bitcoins held, purchasing additional BTC, increasing market capitalization. A cycle that generated huge profits as long as the market was rising.

But the dynamic is reversed. According to industry analysis, this model is actually a pure liquidity derivative. It only works when shares are traded above the NAV (Net Asset Value) of the underlying bitcoin. When this premium disappears, the entire mechanism flips.

Falling Bitcoin means that shares can no longer be issued profitably. For companies that bought BTC at $107,000, the picture is dramatic. Metaplanet accumulated unrealized losses of about $530 million in December. Nakamoto saw the value of its shares plummet by 98% in just a few weeks.

The leverage effect: amplifier of gains and cataclysm of collapses

Leverage effect is not new in finance, but in the crypto market it takes on extreme proportions. The same financial engineering that fueled extraordinary gains during the bull run now turns every downward move into a destructive cascade.

When BTC drops 30%, the shares of these companies do not fall by the same percentage. Nakamoto, Metaplanet, and other heavily exposed firms record losses reaching 98%. It’s a multiplication of loss reminiscent of the most spectacular memecoin crashes.

The irony is that leverage was celebrated when it multiplied profits. Today, the same mechanism reveals its structural fragility. Those who tried to cut costs and maximize returns are now vulnerable to every market swing.

Three possible scenarios ahead of the storm

For weakened companies affected by leverage, the future presents three distinct branches.

Scenario 1: The new downward equilibrium. The premiums on DAT shares remain compressed indefinitely. In this case, shares become riskier than the same bitcoin, losing the competitive advantage that made them attractive.

Scenario 2: Consolidation and acquisitions. The stronger companies absorb the weaker ones, reducing the number of players in the sector and creating more resilient entities. It’s a natural dynamic during market corrections.

Scenario 3: Return to all-time highs. If Bitcoin reaches new records, companies that maintained discipline in risk management and built liquidity reserves could benefit. But this opportunity will be reserved for those who managed to withstand without exhausting their resources.

The shock hits the entire sector, not just Bitcoin

The effect of collapses does not only concern Bitcoin. Other cryptocurrencies like Ethereum and Solana, when managed through dedicated companies, offer staking and lending mechanisms that theoretically would generate additional revenue. However, these extra revenues did not contain the overall decline in market confidence.

The event of October 10 triggered a cascade of forced sales in futures, amplifying panic. Liquidity has once again become the critical factor. Strategy, one of the most cautious companies, raised $1.44 billion in cash to ensure 12 months of dividends. The message is clear: in crypto as in any market, liquidity is sovereign.

Those who did not build sufficient reserves or based their model on optimistic projections are now suffering the consequences. Mining companies, already pressured by high energy costs, see their margins squeezed by reduced premiums and falling BTC prices.

Numbers that tell the story of the crisis

• $92.21K: current price of Bitcoin (updated January 12, 2026)
• -98%: maximum collapse of Nakamoto’s shares from the peak
• $530 million: unrealized losses accumulated by Metaplanet in December
• $107,000: average purchase price of Bitcoin for Metaplanet and Nakamoto
• $1.44 billion: liquidity reserve raised by Strategy to reassure markets

The crypto storm spares no one. Companies that built sustainable models emerge weakened but survive. Others? Face tough choices: mergers, restructuring, or, in the worst case, insolvency.