It wasn’t hard to see it coming. The stocks had soared too fast, the promises had gotten too big, and the math had gotten too weird. These new companies—public firms built to buy crypto and often doing little else—were supposed to offer investors a lucrative way into the digital-asset boom. Instead, as their stock prices fall and market confidence slips, the question isn’t whether the model is under pressure. Increasingly, it’s how, and how quietly, it could fall apart.
Even as risky assets from stocks to corporate bonds push higher ahead of an expected Federal Reserve interest-rate cut, shares of digital-asset treasury companies are mired in a worsening slide and their tokens are slumping, too. Among the 15 DATs tracked by financial advisory Architect Partners, the average share decline last week was 15%.
Cases are legion. ALT5 Sigma Corp., which holds the WLFI token issued by Trump-linked World Liberty Financial Inc., is down about 50% in just over a week. Healthcare services provider Kindly MD Inc., which holds Bitcoin through subsidiary Nakamoto Holdings, is down around 80% from its May high. Other so-called DATs tied to Ether and Solana have also dropped, dragging down the perceived value of the tokens on their books.
“There are way too many of them and very little differentiation” in the U.S., said Ed Chin, cofounder of Parataxis Capital, which recently funded a South Korean Bitcoin treasury company.
A majority of the well over 100 companies buying cryptocurrencies for their treasuries have launched this year, many of them small firms that recently rebranded overnight—a Japanese nail salon, a cannabis seller, a marketing agency.
Still, in a sign the frenzy hasn’t fully faded, some companies are managing to ride the speculative wave. Shares of Eightco Holdings Inc. jumped over 3,000% on Monday after unveiling a Worldcoin-buying plan and naming Wall Street analyst Dan Ives to its board.
For some, the appeal is clear: a publicly traded wrapper offers access to crypto exposure with potential upside leverage, wrapped in a familiar equity format. And in select cases, that model still commands healthy premiums. But the trade is getting crowded. Too many companies have rushed in, offering little beyond the tokens they hold, and as prices slide, the confidence that sustained those premiums is beginning to fray.
New data suggest the model may be losing steam under its own weight—not just in market sentiment, but in the actual pace of Bitcoin buying. According to CryptoQuant, digital-asset treasury firms purchased just 14,800 Bitcoin in August, down sharply from 66,000 in June. Average purchase sizes are shrinking too, falling to 343 Bitcoin last month—an 86% drop from the 2025 peak. Meanwhile, growth in total Bitcoin holdings has slowed markedly, with treasury companies’ accumulation rate sliding from 163% in March to just 8% in August.
In recent months, many DATs were venturing into more creative territory. Crypto lenders, brokerages, and derivatives desks have built out a bespoke financing ecosystem tailored to treasury firms: Bitcoin-backed loans, token-linked convertibles, structured payouts. For some, these tools offer speed and flexibility that banks can’t match. But for others, they’ve turned the pursuit of income into a high-wire act, layering new risks atop volatile assets, or trading away upside for short-term yield, all while the margin for error narrows.
Smarter Web Co., a London-based web design firm holding Bitcoin, issued a bond pegged to the value of the token, not pounds. That means if Bitcoin rises, so does the amount the company owes. Smarter Web CEO Andrew Webley said only 5% of the firm’s treasury is exposed to the instrument, which he argues is actually less risky than taking on fiat-denominated debt. “If Bitcoin goes up in value, as long as our shares go up by more than Bitcoin, then that will convert into equity,” he said. “If it goes down—we are not exposing ourselves—the worst that can happen is we pay the debt back. Our debt in Bitcoin.”
DDC Enterprise Ltd., once a struggling meal company, has access to more than $1 billion, most of it untapped, through a swirl of debt, equity lines and shelf offerings. Its shares have also tumbled after soaring just weeks ago. DDC didn’t respond to a request for comment.
Nasdaq, where many of these firms are listed, has reportedly begun requiring some token-holding companies to seek shareholder approval before issuing new shares to fund token purchases. The share-sale model has been central to how DATs raise capital without taking on debt.
Strategy and its Japanese counterpart Metaplanet Inc., two of the most prominent DATs, have also seen their stock prices tumble recently after booming over the past year, a sign that even market leaders aren’t immune to the shift in sentiment. Some in the industry are starting to talk about potential consolidation, especially if weaker players continue to struggle and stronger ones begin eyeing the token holdings of peers as acquisition targets.
Strategy was left out of the S&P 500 in Friday’s index rebalance, despite meeting eligibility criteria. Its stock has gone largely nowhere since April, even as Bitcoin rallied, reducing the multiple of its Bitcoin to market capitalization—known as mNAV—to about 1.5. On Monday, the company bought a modest $217 million of Bitcoin via its at-the-market offering. Strategy didn’t respond to a request for comment.
The growing demand for flexible financing hasn’t gone unnoticed by crypto lenders. Two Prime, which provides Bitcoin-backed loans, is one of several firms seeing an uptick in interest from DATs, according to CEO Alexander Blume. The company typically underwrites loans between $10 million and $500 million, and now has $1.25 billion in active open loans. It recently introduced a structure with fixed repayment at maturity, removing monthly interest obligations, a design meant to give borrowers more breathing room in volatile markets.
“Bitcoin treasury companies are a growing field for us,” Blume said. “We have seen larger and larger ticket sizes over the last year.”
Whether this new financing ecosystem sustains the model or merely postpones its demise is unclear. For now, the next phase may not be a dramatic unraveling, but a slow fade, as stock prices drip lower and token-buying stalls.
Some investors are struggling to make sense of it all. Why buy crypto through a company layered with expenses, risk, and equity dilution, instead of just holding coins directly or through an ETF? “I’ve been trying to convince myself to buy some of these DATs,” said Travis Kling, chief investment officer at Ikigai Asset Management. “Haven’t gotten there. May never get there.” To him, the whole setup feels like “the last gasp of a cycle that couldn’t come up with anything better than this silliness.”
