Digital treasury companies are facing increasing financial pressures after Bitcoin and Ethereum dropped by nearly 30% over the week, wiping out an estimated $25 billion in unrealized value across the balance sheets of digital assets.
Data from public treasury companies tracking cryptocurrencies shows that there are currently no assets exceeding the average cost basis. The sharp decline has pushed most treasury bond strategies into the loss territory at the same time, raising concerns about liquidity, financing, and long-term survival.
Deals hit companies that rely on treasury bonds at the same time.
Large holders recorded deeper losses on paper, leading to a sharp withdrawal of cumulative unrealized profit and loss ratios. The losses are unrealized, but the volume is important as it weakens balance sheets and stock valuations.
As a result, the market shifted from accumulating rewarding cryptocurrencies to pricing survival risks.
Market premiums collapsed
A key pressure signal is the collapse of net asset value in the market (mNAV), which compares the company's stock valuation to the value of its holdings in digital currencies.
Many major treasury companies are now trading below the large net asset value (mNAV) of 1, which means the market values their equity at a discount to the assets they hold. This eliminates the ability to raise capital efficiently through equity issuance without price dilution.
MicroStrategy, one of the largest corporate bitcoin holders, is trading below the value of its assets despite holding tens of billions of dollars in digital currencies.
This discount limits its flexibility in financing further purchases or refinancing at low cost.
Unrealized losses alone do not cause bankruptcy. The risk rises when falling asset prices collide with leverage, debt maturity, or continued cash burn.
Mining companies and treasury devices that rely on external financing face the highest exposure. If cryptocurrency prices remain low, lenders may tighten terms, equity markets may stay closed, and refinancing options may narrow.
This creates a feedback loop. Falling prices reduce stock values, limiting access to capital and increasing pressure on balance sheets.
Stress phase, not collapse
The current decline reflects forced funding reductions and tighter financial conditions rather than a failure of digital assets themselves.
However, if prices fail to recover and capital markets remain constrained, the pressure may worsen.
Currently, digital treasury companies remain able to stabilize. However, the margin for error has sharply decreased.
