Crypto’s $25 billion spree sparks unease even among insiders

The rush to convert listed companies into vehicles for buying cryptocurrencies has reached such a fever pitch that even executives backing such deals are warning of potential fallout for digital-asset prices.

So-called digital-asset treasury firms, or DATs, have announced plans to raise a combined $79 billion so far in 2025 just for Bitcoin purchases, according to advisory firm Architect Partners. But it’s the trend of expanding into smaller tokens — along with the sheer number of such efforts — that has market participants on edge.

While the movement helped fuel a rebound in altcoins from April lows, the worry is that a sharp reversal in prices could prompt some entities to dump their holdings, exacerbating any selloff. One potential trigger for such selling is a steep drop in DAT shares that pushes their market values materially below net asset values, executives said.

“I think the collapse of a major DAT is going to set the dominoes in motion for this bull cycle to end,” said Akshat Vaidya, who as head of BitMEX co-founder Arthur Hayes’s family office Maelstrom has overseen investments in three publicly traded companies that pivoted to crypto buying. He said he still receives five to 10 pitches a week to invest in prospective treasuries. Treasury firms have announced some $25 billion in planned funding this year for accumulating altcoins, ranging from Ether to Solana and TON, Architect Partners estimates.

Bitcoin Shielded

So far, there’s little evidence of crypto hoarders selling their tokens under duress. But several of the biggest DATs have seen stock prices swoon. Metaplanet Inc., the Japanese hotel operator that’s accumulated $2 billion of Bitcoin, is down around 50% from a mid-June high. Upexi Inc., which this year pivoted to buying the Solana altcoin and in which Maelstrom invested, has lost roughly two-thirds of its market value since late April.

The risk of market fallout for Bitcoin appears lower, in part because it’s less volatile than smaller cryptocurrencies and in part because liquidity is higher. Another cushion is that Michael Saylor’s Strategy, the original Bitcoin accumulator and by far the biggest, hasn’t sold a single token in the five years since it started building a hoard that’s now worth around $70 billion.

Some of crypto’s top executives are less sanguine about the more recent upstarts. Michael Novogratz, the chief executive of Galaxy Digital, said on Tuesday that the dash to create new DATs has likely peaked and that new entrants may “have a harder time getting oxygen.”

Altcoins are notoriously volatile, raising the risk of a vicious cycle of forced selling and spiraling prices. An index of smaller tokens has already gone through three cycles of falling or rising more than 55% this year, and is down some 15% since reaching a five-month high on July 22.

An Architect Partners analysis of about 30 firms accumulating a range of different tokens shows they had recorded median gains of about 14% as of July 31. Strip out announcement-day spikes, however, and the return dropped to a negative 6.5%.

One measure market watchers focus on is DATs’ enterprise value relative to the size of their crypto holdings, known as mNAV. To Evgeny Gaevoy, CEO of crypto market maker Wintermute, the main concern is that once weaker entities see their mNAV dive below 1, they may start selling their tokens.

Metaplanet’s mNAV currently stands at 2.39, according to its website. Upexi’s is at 1.7.

“My current thesis is that when we enter into some kind of bear market in altcoins, those altcoins that have enough net asset value in the treasury companies will probably suffer the most,” Gaevoy said. Wintermute has invested in “a few” DATs in deals that haven’t yet been made public, he added.

Insider Selling

Bankers seeking to maximize fees from arranging fundraising for DATs are pushing out as many as possible without regard for quality, Vaidya said. At the same time, at least some of the transactions have involved insiders loading up on shares in the entity and the digital token it will invest in before its pivot is made public — and then selling when the announcement is made, according to Vaidya.

Some treasury firms have seen their stock nosedive after routine filings to officially register shares that freed them up for selling by insiders.

Evgeny Gokhberg, whose decentralized-finance hedge fund firm Re7 Capital has a partnership with Trump family-affiliated World Liberty Financial Inc., said he has steered clear of investing in crypto treasuries, in part because “it doesn’t really make sense” for the entities to trade above NAV “unless there is a clearly articulated yield-seeking strategy for the underlying assets, which few have.”

Investors who do dive in “might be betting on short-term market excitement and exuberance,” he said. “But if you’re late in jumping onto the train, the odds are you’ll get punished and you’ll just be stuck at a discount without a positive carry.”