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"Crypto treasury firms have been stealing the spotlight lately, snapping up billions in Bitcoin and altcoins, and fuelling wild optimism across the market. But there’s a question in the back of every investor’s mind: what happens when these firms start selling?
Well, it looks like we’re about to find out. A few crypto treasuries have quietly begun unloading their holdings, leaving investors wondering whether this could be the start of a broader sell-off. Needless to say, the ripple effects could be massive.
Today, we’re breaking down who’s selling, why it’s happening, and which cryptos could take the biggest hit if the dominoes start to fall."
~ Coin Bureau
The video warns about the changing dynamics of Digital Asset Treasury Companies (DATs), which are institutions that hold significant cryptocurrency reserves. While the initial trend of these companies buying up Bitcoin and altcoins was highly bullish, the video highlights that some have begun selling, which could trigger a sharp market reversal. Specific examples include Ethzilla, which sold approximately $40 million in ETH to fund a share buyback program, and Seckons, which sold 970 BTC (valued over $90 million) to redeem outstanding debt. The underlying cause for these sales is a falling Net Asset Value (NAV), where the companies' shares were trading at a discount to their crypto holdings. Selling the crypto was an attempt to rebalance this ratio and restore financial health.
This institutional selling has created uncertainty throughout the DAT industry, which collectively holds hundreds of billions in crypto assets, making the market vulnerable to a sudden supply shock. Bitcoin and Ethereum are the most exposed, followed by assets like XRP, Solana, and Toncoin, all held by multiple DATs. The extent of the market impact depends on whether the sales happen on the open market (which would be highly bearish) or Over-The-Counter (OTC), which the market could handle more easily. To survive the current pressures and improve their NAV, many DATs are resorting to large-scale share buyback programs to boost investor confidence, a trend started by companies like Bitmine and Sharplink. Other strategies discussed include staking crypto reserves to generate yield or leveraging holdings for collateralized loans, though these methods introduce additional risks like lockup periods or potential liquidations. Ultimately, the video suggests that positive momentum from spot crypto ETFs could help stabilize the market and alleviate the pressure on struggling DATs.
0:00 Intro
0:49 Early Crypto Treasury Company Sales
5:32 How Much Could Crypto Treasuries Sell?
9:46 Other Signs Of Treasury Company Weakness
14:11 Alternative Ways Treasury Companies Could Stay Afloat
16:59 Could These Risks Be Offset Elsewhere?
Source - Coin Bureau YouTube: https://www.youtube.com/watch?v=54Oz1G5ilwE
Disclaimer: This video is provided for informational purposes only, and not offered or intended to be used as legal, tax, investment, financial, or any other advice.
