Crypto’s $25 Billion Jump Sparks Worries Among Industry Experts

The rush to turn publicly listed companies into platforms for purchasing cryptocurrencies has intensified, prompting even leaders who advocate for these endeavors to heed warnings regarding potential impacts on digital asset values.

As per advisory firm Architect Partners, digital-asset treasury companies (DATs) are poised to raise a staggering $79 billion specifically for Bitcoin acquisitions in 2025. However, the growing trend to invest in smaller tokens, alongside the enormous number of these initiatives, is causing unease among market participants.

This trend has aided in the recovery of altcoins since the lows of April, yet there is apprehension that a sudden price decline could push certain entities to liquidate their assets, exacerbating any sell-off. Executives noted that a substantial drop in DAT shares, leading their market valuations to fall well below net asset values, could provoke such liquidations.

“The failure of a leading DAT could ignite a chain reaction that brings this bullish cycle to an end,” explained Akshat Vaidya, head of BitMEX co-founder Arthur Hayes’s family office, Maelstrom, which has managed investments in three publicly traded companies transitioning toward cryptocurrency acquisition. He also mentioned receiving five to ten investment pitches weekly for prospective treasury projects.

This year, treasury firms are set to invest approximately $25 billion in acquiring altcoins, such as Ether, Solana, and TON, according to Architect Partners’ estimates.

Bitcoin’s Robustness

Currently, there is scant evidence of cryptocurrency investors being compelled to sell their tokens. Nevertheless, several prominent DATs have faced declines in their stock prices. Metaplanet, a Japanese hotel chain that has invested $2 billion in Bitcoin, has witnessed its share price decrease by around 50% from a mid-June high. Upexi, which pivoted to acquiring the Solana altcoin and has garnered investment from Maelstrom, has lost nearly two-thirds of its market value since late April.

The risk of a market crash for Bitcoin appears diminished, partly due to its lower volatility compared to smaller cryptocurrencies and increased liquidity. An added layer of protection stems from Michael Saylor’s Strategy, the original Bitcoin accumulator and the largest player in this realm, which has neither sold a single token in five years of accumulating, now amounting to around $70 billion in value.

Some prominent voices in the cryptocurrency industry express skepticism about new entrants. Michael Novogratz, CEO of Galaxy Digital, indicated on Tuesday that the surge to launch new DATs has likely peaked, making it increasingly difficult for new participants to thrive.

Altcoins are notoriously unstable, raising the likelihood of a damaging cycle of forced selling and declining prices. An index of smaller tokens has already experienced three cycles of fluctuations surpassing 55% this year and is down roughly 15% since hitting a five-month peak on July 22.

An analysis by Architect Partners of about 30 firms collecting various tokens showed median gains of approximately 14% as of July 31. However, eliminating spikes from announcement days reveals a decline to a negative 6.5% return.

A key metric that market watchers track is the enterprise value of DATs compared to their crypto holdings, referred to as mNAV. Evgeny Gaevoy, CEO of crypto market maker Wintermute, emphasized that the primary concern is that when struggling companies see their mNAV dip below 1, they may start selling off their tokens.

At present, Metaplanet’s mNAV is reported at 2.39 on its website, while Upexi’s stands at 1.7.

“I believe that when we enter a bear market for altcoins, the altcoins with substantial net asset value in treasury companies are likely to be impacted the most,” Gaevoy remarked, adding that Wintermute has invested in “a few” DATs in deals not yet made public.

Insider Trading Concerns

Bankers striving to maximize fees from arranging fundraising for DATs are inundating the market with as many offerings as possible, often neglecting quality, as Vaidya noted. Concurrently, some of these deals have involved insiders buying shares in the company and the digital token it aims to invest in before public announcements, followed by selling after the news breaks.

Some treasury companies have seen their stock prices collapse following standard filings to register shares, permitting insiders to sell.

Evgeny Gokhberg, whose decentralized finance hedge fund firm Re7 Capital collaborates with the Trump family-affiliated World Liberty Financial Inc., mentioned that he has steered clear of investing in crypto treasuries partly because “it doesn’t really make sense” for these entities to trade above NAV “unless there is a well-defined yield-seeking strategy for the underlying assets, which few possess.”

Investors who choose to dive into these ventures “may be gambling on short-term market hype and enthusiasm,” he added. “But if you enter late, the odds are against you, and you might find yourself at a loss without any positive return.”

© 2025 Bloomberg

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