Encryption financial storm: Why have 12 listed companies' BTC/ETH balances shrunk?

As the year 2025 begins, the concept of “encryption finance” (DAT) is incredibly popular—companies buy BTC/ETH as a treasury, finance stock trading, and then use the stocks to finance further coin purchases. A perfect cycle, or rather, a dangerous gamble.

But recently things went wrong.

12 Companies with Shrinking Balance Sheets

With the recent adjustments in BTC/ETH, among the more than 200 DAT companies, at least 12 of them have mNav (the ratio of market value to coin value) falling below 1—which means that the company's market value is now lower than the value of the BTC/ETH it holds. Sounds unbelievable, right? But the data is right here:

**BTC's “disaster zone”: **

• MicroStrategy: Holds 641,692 BTC (worth $65 billion), but its market value is only $63.7 billion, with an mNav of only 0.979 - this is a “master-level” company in the DAT concept.
• Metaplanet: Holds 30,823 BTC, mNav drops to 0.968
• Semler Scientific: mNav is only 0.73
• Empery Digital: mNav plummeted to 0.595

ETH Holding Companies Are Worse Off:

• The Ether Machine: mNav only 0.08, in name only.
• BTCS Inc., FG Nexus, and ETHZilla's mNav is hovering between 0.6 and 0.86.

Where is the breaking point of the cycle?

The logic of DAT is very simple: financing → buying coins → coin rises → stock rises → continue financing. But once the coin falls, the entire chain is broken.

The problem arises - bonds need to be repaid, and shareholders need to be active. Some companies have already begun to “lose money to avert disaster”:

• Sequans Communications: Sold 970 BTC to repay 50% of convertible bonds, reducing debt from 189 million USD to 95 million USD.
• ETHZilla: Spent 40 million USD in ETH to buy back stocks, but the stock price fell faster than the coin.

It looks like a situation of “the more you save, the more it falls.”

Real Risk: Large Holders Forced to Sell

If these companies continue to incur losses, they will ultimately face two choices: either sell coins to pay off debts or be acquired out of the market.

Imagine this - giants like Strategy and Metaplanet holding hundreds of thousands of BTC and ETH. What would happen if they were forced to sell off simultaneously to pay debts or maintain operations? This is not just a problem of small investors crashing; this is a institutional level dump risk.

The only buffer is MicroStrategy CEO Michael Saylor's “diamond hands” commitment — he said he wouldn't sell. However, according to analysis, Strategy's convertible bonds will need to repay nine-figure debt by 2027, and unless BTC breaks above $90,000, the pressure will only increase.

Will Wall Street come to the rescue?

Ironically, the DAT concept initially attracted a lot of attention from TradFi institutions (such as Ark Invest, BlackRock, JPMorgan, etc.). But now, after mNav fell below 1, these conservative big players have started to fall silent.

The example of ETHZilla illustrates the issue well—despite the rebound in the encryption market, its stock has dropped more than ETH itself. In other words, TradFi's confidence in DAT stocks is evaporating now.

What will the ending be like?

In the short term, DATs will maintain the status quo through small accumulations. In the medium term, if BTC/ETH enters a bear market or continues to fluctuate, debt pressure will gradually become apparent. In the long term, the most likely outcome is:

1. Small DAT is absorbed by large DAT (further centralization)
2. Or be forced to sell coins in large quantities to pay off debts (which may cause a market downturn)
3. Or wait for the favorable Trump policies (probability unknown)

For us on the chain, the most crucial thing is: do not confuse the fate of DAT stocks with the value of BTC/ETH. The value of the coin and the valuation of the company have now started to decouple.

To be honest, how things will go in the next 3-6 months depends on whether MicroStrategy can hold its ground and when Wall Street will once again have a positive outlook on this concept.