Why Treasury Firms Are Embracing the Crypto Wave: A New Era of Investments
How crypto treasury companies are reshaping digital asset markets — risks, strategies, and what investors should watch next.
Cryptocurrency treasury companies, or Digital Asset Treasuries (DATs), have exploded onto the scene in 2025. These firms buy and hold massive amounts of BTC, ETH, and altcoins on their balance sheets, signaling bullish confidence to investors. But recently, some key players have started selling portions of their holdings, sparking questions about the stability of this new investment wave.
In this article, you'll learn which treasury companies are selling crypto, why they're doing it, what it means for the market, and how DATs are adapting with buybacks, staking, and leverage strategies. Whether you’re a beginner or seasoned investor, understanding this dynamic helps you anticipate market shifts and spot emerging opportunities.
What Are Digital Asset Treasury Companies and Why Do They Matter?
DATs are firms that allocate large portions of their capital into cryptocurrencies as reserve assets. The pioneer of this model was MicroStrategy (now just Strategy), which started buying Bitcoin aggressively in 2020. Others quickly followed, expanding into altcoins like Ethereum, Solana, and Toncoin, helping fuel price rallies in those tokens.
Why they matter: DATs collectively hold hundreds of billions of dollars in crypto— BTC treasuries alone top 4 million coins worth around $18 billion. Their buying pressure has helped prop up prices. But their influence cuts both ways — if they sell, it could trigger significant market volatility.
Recent Sell-Offs: Who’s Selling and Why?
Two notable DATs, Ethzilla (ETH treasury) and Secons (BTC treasury), recently offloaded crypto assets:
- Ethzilla sold $40 million in ETH on October 27 to fund a $12 million share buyback as part of a $250 million program.
- Secons sold 970 BTC worth $90 million on November 4 to redeem 50% of convertible debt valued at $189 million.
The common theme? Both companies experienced declining Net Asset Value (NAV) — a measurement of whether their stock price reflects a premium or discount to their crypto holdings. For Secons and Ethzilla, NAV slipped into negative territory, prompting sales to rebalance ratios and support share prices.
Answer Box:
What is NAV and why does it matter for crypto treasury firms?
NAV (Net Asset Value) compares a company’s share price to the value of its crypto holdings. A negative NAV means shares trade below the value of assets backing them, pressuring firms to sell crypto or buy back shares to restore investor confidence.
Secons’ CEO explained this move "enhanced financial flexibility" by reducing debt-to-NAV ratios, while Ethzilla’s CEO emphasized increasing NAV per share by repurchasing stock when trading below NAV.
Market Impact: Which Cryptos Could Be Hit Hard?
The sell-offs have caused jitters across the crypto treasury space. More broadly, if multiple DATs start dumping holdings, prices of their favorite cryptos—especially BTC and ETH—could face steep pressure.
Top Cryptos Held by DATs
| Crypto | Number of Treasury Companies | Total Holdings | Approximate Value |
|---|---|---|---|
| Bitcoin (BTC) | 190 | 4+ million BTC | $18 billion |
| Ethereum (ETH) | 71 | 6.1 million ETH | $21 billion |
| XRP | 10 | 2.1 billion XRP | $11.5 billion |
| Solana (SOL) | 20 | 20 million SOL | $3.3 billion |
| Toncoin (TON) | 3 | 568 million TON | $1.2 billion |
| Binance Coin (BNB) | 2 | 608,000 BNB | $600 million |
| Avalanche (AVAX) | 2 | 400,000+ AVAX combined | $560 million |
Smaller players like SUI, Tron, Dogecoin, Litecoin, and meme coins like Bonk also have notable treasury backing.
Data Callout:
Ethzilla’s October 27 ETH sale represented about 8% of its reserves, leaving it with ~94,000 ETH valued at $321 million. Secons trimmed its BTC holdings by roughly 30%, still holding 2,264 BTC (~$230 million).
If additional DATs sell on spot markets, this could overwhelm liquidity and trigger sharp price drops. Over-the-counter (OTC) sales can mitigate shock by avoiding impacting immediate market prices, but risks remain if buyers eventually dump their tokens elsewhere.
How Are DATs Fighting Back?
Rather than panicking, many DATs are adopting strategic tools to stabilize their value and continue accumulating crypto:
1. Share Buybacks
By buying back their own shares, DATs reduce supply and push NAV back toward a premium. Notable programs include:
- Ethzilla’s $250 million buyback plan (started in August)
- Sharlink’s $1.5 billion buyback using staking rewards and cash
- Metaplanet’s $500 million buyback backed by BTC credit
- Defi Development Corp. expanding buybacks from $1M to $100M
This often boosts investor confidence and share prices, at least temporarily.
2. Staking Holdings
DATs holding stakeable tokens like ETH, SOL, TON, and BNB can earn rewards by locking funds in staking protocols. This generates additional revenue but comes with lockup risks and potential missed opportunities if assets are illiquid during price swings.
3. Leveraging Crypto Reserves
Some DATs borrow against their holdings to grow positions without selling tokens—for example, MicroStrategy famously does this. While enhancing accumulation potential, this adds risk of liquidation if market prices fall.
4. Raising Capital via Convertible Notes
Issuing convertible debt helps raise funds quickly, though conversion dilutes existing shareholders. This tactic requires balance to avoid eroding investor trust.
5. Operational Revenue from Existing Business
Many DATs stem from companies with other revenue streams. Using this cash to support crypto buys or buybacks can help, but also diverts focus from core business growth.
Risks / What Could Go Wrong?
- Market Saturation & Demand Dilution:
Rapid growth in DATs means stronger competition for capital and investor attention, hurting NAV premiums. - Liquidation Traps:
High leverage exposes some companies to forced asset sales if crypto prices dips. - Share Dilution:
Excessive stock issuance can damage shareholder value and confidence. - Panic Selling:
If major DATs lose faith or need liquidity, large-scale asset dumps could create a cascading price drop. - Staking Lockup Risks:
Token lockup periods may exacerbate downside vulnerability during volatile markets.
Actionable Summary for Investors
- Crypto treasury firms significantly influence BTC, ETH, and altcoin prices via massive holdings.
- Recent selling by Ethzilla and Secons reflects stresses from NAV discount pressures.
- Watch NAV trends and share buyback announcements for market sentiment clues.
- Buybacks, staking, and debt leverage help DATs balance growth and solvency but carry risks.
- Large-scale selling by DATs could trigger heightened crypto volatility but is not inevitable.
Want deeper analysis on crypto signals, portfolio management, and risk controls that DATs use?
Get the full playbook and entries in today’s Wolfy Wealth PRO brief—expert insights for serious investors navigating these shifts.
FAQ
Q: What triggers a crypto treasury company's decision to sell assets?
A: Typically, a drop in Net Asset Value (NAV) and the need to rebalance debt or fund share buybacks prompt asset sales.
Q: How do share buybacks help crypto treasury companies?
A: Buybacks reduce outstanding shares, potentially increasing NAV per share and investor confidence.
Q: What is the risk when companies use leverage on crypto holdings?
A: If crypto prices fall, companies face liquidation risk, possibly forcing asset sales at low prices.
Q: Can staking income sustain a crypto treasury company?
A: Staking rewards generate passive income but require asset lockup, which can increase exposure to market swings.
Q: How might ETF inflows affect crypto treasury firms?
A: Positive ETF inflows could raise altcoin prices, boosting DAT holdings via a feedback loop of rising NAV and investor interest.
Disclaimer: This article is educational content only and does not constitute financial advice. Crypto investments carry substantial risks and may result in loss. Always do your own research and consult a professional before investing.
By Wolfy Wealth - Empowering crypto investors since 2016
Subscribe to Wolfy Wealth PRO
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
