How crypto treasury companies exploded, faltered, and what their future holds for investors and the market
Crypto treasury companies, also called digital asset treasury companies (DATCOs), exploded onto the scene over the past couple of years. These firms grabbed billions in crypto assets, signaling bullishness for the market. Yet, behind the hype lies a complex story of sharp declines, mounting investor skepticism, and shaky fundraising. Today, we break down the latest CoinGecko 2025 Digital Asset Treasury Company (DATCO) report in plain language to reveal what’s really happening—and what it means for crypto investors now and going forward.
What Are Crypto Treasury Companies (DATCOs)?
Simply put, DATCOs are publicly traded companies using cryptocurrency as a core part of their business holdings or model.
There are three main types:
- Mining Companies: Established crypto miners holding significant assets since 2017.
- Pure Play Treasury Firms: Focused entirely on building crypto treasuries, typically raising money through equity (selling stock) and sometimes earning cash flow by staking coins.
- Diversified Companies: Previously traditional companies now holding crypto on balance sheets, often following MicroStrategy’s lead with large Bitcoin (BTC) holdings.
MicroStrategy (MSTR) is the poster child here. It owns nearly 650,000 BTC—about 3% of the total Bitcoin supply—with a market cap around $50 billion. Its stock often traded above the value of its Bitcoin, letting it raise more money to buy crypto via equity offerings.
However, recent Bitcoin price falls caused MSTR's MNAV (multiple net asset value) to dip below 1 for the first time in years. This means its stock price is now lower than the value of its crypto holdings, crimping its ability to raise funds further.
Massive Growth Followed by Market Saturation
The number of DATCOs has skyrocketed recently, from 142 in the report to well over 200 today. Among them:
- Bitcoin-focused DATCOs: Hold over 1 million BTC total, about 5% of Bitcoin’s entire supply.
- Ethereum-focused DATCOs: Accumulated over 6.2 million ETH, 5% of Ethereum supply.
- Solana-focused DATCOs: Amassed over 20 million SOL tokens, around 3.5% of Solana supply.
- BNB-focused DATCOs: Hold roughly 643,000 BNB, less than 1% of the supply.
MicroStrategy dominates Bitcoin treasuries with 61% of all BTC held by treasury firms. Ethereum’s biggest treasury is Bitmine, holding 3.5 million ETH, while Solana’s largest is Forward Industries, holding 6.8 million SOL.
But it’s not just buying volume—many DATCOs raised funds through equity sales, causing share dilution and complicated investor dynamics. Increased supply of these firms has led to cooling enthusiasm and depressed share prices.
How Do DATCOs Fund Crypto Accumulation?
Funding crypto purchases is mostly done through equity-based methods, each with pros and cons:
- Private Investment in Public Equity (PIPE deals): Sell shares at a discount to large investors for quick capital. But discounted shares can push stock prices down, and institutional investors gain outsized control.
- At-The-Market (ATM) Sales: Continuous, smaller stock sales at market prices. Flexible without big price jumps but dilute existing shareholders.
- Perpetual Preference Shares: Hybrid stocks paying dividends without diluting common shareholders. Risky since pure Bitcoin holdings don’t produce yield.
- Convertible Senior Notes: Bonds convertible to shares, offering debt protection plus equity upside. Debt must be repaid, which can strain finances amid crypto volatility.
With Bitcoin prices falling sharply, MSTR’s MNAV dropping below 1 reflects a tougher fundraising environment for many DATCOs.
What Has Happened to DATCO Stock Prices?
Typically, a crypto treasury pivot leads to parabolic stock gains in the first 10 days, sometimes 30x or more. Bitmine’s stock for example surged nearly 30 times shortly after its announcement. But often, prices retrace quickly afterward.
Some faced steep crashes. Alt 5 Sigma’s stock plunged 71% within 44 days following its crypto pivot. Mining companies mostly struggled until BTC’s strong Q3 run. Notably, Cipher Mining closed October 2025 up 286% year-to-date despite not holding the largest treasury.
Key Metric: MNAV (Multiple Net Asset Value)
MNAV is a simple measure comparing company enterprise value to asset value:
MNAV = Enterprise Value / Assets Held
- Above 1: Market values company above its crypto holdings, signaling confidence.
- Below 1: Market values company less than its holdings, implying investor concerns and tougher capital raising.
Due to market saturation and bearish sentiment, many DATCOs now trade below 1 MNAV, limiting growth prospects.
The Big Picture: What Comes Next?
October 2025 saw $20 billion in crypto liquidations, crushing DATCO asset values and plunging MNAVs across the board. Even MicroStrategy’s MNAV dropped to 0.88, its lowest in years.
This downturn makes fundraising difficult and leaves investors with paper losses. Many fear fallout for the wider crypto market.
But indicators suggest the worst might be behind us:
- Over 100 technical and macro signals analyzed indicate a crypto market bottom is near or has passed.
- Bitcoin's RSI (Relative Strength Index) is at lows last seen during prior bear markets.
- Price behavior relative to Bollinger Bands points toward a potential buying dip bounce.
- Bitcoin dominance has declined, signaling money rotating into altcoins—potentially setting the stage for altcoin outperformance in a late-cycle rally.
A final Bitcoin rally could increase crypto valuations organically, improving DATCO MNAVs without diluting stocks or incurring debt.
However, if prices fall further instead, expect consolidation:
- Smaller DATCOs may be acquired or merged into larger, stronger firms.
- The market could enter a prolonged bear phase, delaying recovery.
Risks: What Could Go Wrong?
- Continued Price Declines: Further crypto price falls deepen losses in DATCO assets, worsening fundraising struggles.
- Investor Fatigue: Overcrowding and repeated share dilution can erode confidence.
- Market Volatility: Debt instruments like convertible notes risk default amid price swings and rising rates.
- Regulatory Risks: Increased scrutiny on equity offerings tied to crypto may raise costs or restrict capital.
- Consolidation Risks: Smaller or poorly managed DATCOs may disappear, impacting shareholders negatively.
Data Callout:
MicroStrategy holds nearly 650,000 BTC — over 3% of Bitcoin’s total supply — making it a major player shaping crypto treasury trends.
Answer Box:
What is a crypto treasury company (DATCO)?
A crypto treasury company (DATCO) is a publicly traded firm that holds cryptocurrency as a core asset. They build up crypto treasuries by mining, buying crypto via equity fundraising, or diversifying existing businesses to include crypto holdings.
Actionable Summary:
- DATCOs exploded in number and assets 2023-2025 but face a fundraising crisis as stock prices fall below asset values.
- MicroStrategy leads the pack, holding over 3% of all BTC, but even it struggles with its market valuation.
- Equity-based fundraising methods risk diluting shares and investor confidence, making capital raising harder.
- Despite widespread price declines, indicators suggest the crypto market may have bottomed, offering a rebound opportunity.
- Investors should watch MNAV values as a key sign of treasury firm health and market sentiment.
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FAQ
Q1: How do DATCOs typically buy crypto assets?
Most purchase crypto via equity fundraising—selling shares to raise capital—using methods like PIPE deals or ATM sales.
Q2: Why do some DATCO stocks trade below the value of their crypto holdings?
When their MNAV falls below 1, it indicates the market is skeptical of their management or future growth, resulting in stock prices below asset value.
Q3: Can DATCOs generate income from Bitcoin holdings?
No, Bitcoin itself doesn’t produce yield, which poses challenges for firms issuing preference shares that pay dividends.
Q4: What happens if DATCO share prices keep declining?
It makes fundraising tough, potentially leading to mergers, consolidations, or even collapses of smaller firms.
Q5: Is the crypto market bottoming soon?
Multiple technical indicators suggest a bottom may be near, possibly ushering in a last rally for Bitcoin and altcoins in this cycle.
Disclaimer: This article is educational and not financial advice. Crypto investing involves risks, including loss of principal. Always do your research or consult a licensed advisor.
By Wolfy Wealth - Empowering crypto investors since 2016
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Disclosure: Authors may be crypto investors mentioned in this newsletter. Wolfy Wealth Crypto newsletter, does not represent an offer to trade securities or other financial instruments. Our analyses, information and investment strategies are for informational purposes only, in order to spread knowledge about the crypto market. Any investments in variable income may cause partial or total loss of the capital used. Therefore, the recipient of this newsletter should always develop their own analyses and investment strategies. In addition, any investment decisions should be based on the investor's risk profile
