Cryptocurrency Prices vs. Digital Asset Treasury Firms: An Intriguing 1:4 Pattern Emerges

The leading cryptocurrency has demonstrated remarkable resilience compared to companies that have incorporated it into their treasury strategies. However, the disparity between the digital asset and these entities is becoming increasingly evident.

In the past two and a half months, shares of Digital Asset Treasury Companies (DATCs) have experienced a sharp decline, losing between 50% and 80% of their value. This divergence reveals an unusual trend, effectively creating a “1:4 ratio” in cycle behavior.

12 Mini-Downturns in a Year and a Half

The price action of the leading cryptocurrency over the past 18 months has predominantly followed a bullish trajectory on a macro level, with the digital asset establishing new price records during this period. This trend has prompted numerous companies to adopt a digital asset treasury strategy in their balance sheets, earning them the moniker of Digital Asset Treasury Companies (DATCs).

However, according to analysis by cryptocurrency commentator Mark Moss, the stock prices of companies with a digital asset strategy have diverged from the leading cryptocurrency, losing between 50% and 80% of their stock value over the last ten weeks. This divergence, Moss observed, demonstrates an unusual 1:4 cycle ratio where corporate digital asset holders undergo four mini-cycles for every one cryptocurrency market cycle.

A prime example of this phenomenon is the Japanese firm MetaPlanet. Over the past year and a half, its stock ($MTPLF) has experienced 12 distinct downturns, ranging from sharp single-day plunges to extended declines spanning several months. On average, these downturns erased 32.4% of value and lasted approximately 20 days. The briefest correction was a severe one-day slide of 22.2% in April 2024, while the longest and deepest crash persisted for 119 days from July to November 2024, wiping out 78.6%.

The chart depicting MetaPlanet’s stock shows repeated selloff cycles that appear far more compressed and extreme than the leading cryptocurrency’s price corrections over the past year and a half.

Correlation with the Leading Cryptocurrency?

Interestingly, only 41.7% of MetaPlanet’s downturns have directly coincided with the leading cryptocurrency’s corrections. Of the 12 mini-bear markets identified, just 5 occurred in sync with the digital asset’s declines. The majority (7 out of 12) were unrelated to the cryptocurrency and were instead triggered by company-specific factors. According to Moss, these factors include warrant exercises, fundraising activities, and compression of the digital asset premium that MetaPlanet trades at compared to its holdings.

The two most severe downturns, however, did overlap with cryptocurrency volatility. The -78.6% collapse in late 2024 and a -54.4% downturn both coincided with periods when the leading digital asset itself was undergoing corrections. These overlapping events suggest that while cryptocurrency volatility sometimes contributes to the downturn, MetaPlanet’s stock selloffs tend to extend beyond digital asset downturns.

In essence, this implies that instead of 4-year cycles for the leading cryptocurrency, DATCs are now experiencing something more akin to 4 cycles in a single year.

As of this writing, the leading cryptocurrency is in a correction phase and is struggling to maintain support above the $110,000 level. Popular DATC stocks are also grappling with downtrends alongside the digital asset. Strategy’s stock has declined 37.1% from its 52-week high, while MetaPlanet is down 58.6%. Other firms, such as The Smarter Web Company PLC (-83.6%) and The Blockchain Group (-70.7%), are facing even greater losses.