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

The rush to convert publicly traded companies into platforms for acquiring cryptocurrencies has intensified, with even executives promoting these initiatives warned about the possible impacts on digital asset prices.

According to consultancy Architect Partners, digital-asset treasury firms (DATs) intend to raise a staggering $79 billion for Bitcoin acquisitions alone by 2025. However, the inclination to invest in smaller tokens, coupled with the overwhelming number of ventures, has left market stakeholders feeling apprehensive.

While this trend has facilitated a recovery in altcoins since the lows experienced in April, there are concerns that an abrupt price drop could compel some entities to liquidate their assets, exacerbating any sell-off. Executives have noted that a significant dip in DAT shares, leading to a decline in market values well below net asset values, could instigate such sell-offs.

“The collapse of a major DAT could trigger a chain reaction that brings this bull cycle to an end,” stated Akshat Vaidya, head of Maelstrom, the family office of BitMEX co-founder Arthur Hayes, which has managed investments in three publicly listed companies pivoting toward cryptocurrency acquisition. He mentioned he continues to receive five to ten investment pitches weekly for potential treasury ventures.

This year, treasury firms have disclosed plans to allocate approximately $25 billion towards acquiring altcoins such as Ether, Solana, and TON, as estimated by Architect Partners.

Bitcoin’s Resilience

Currently, there is little evidence of crypto investors being pressured to sell their tokens. Nonetheless, several prominent DATs have witnessed falling stock prices. Metaplanet, a Japanese hotel chain that has amassed $2 billion in Bitcoin, has seen its share price decline by around 50% from a mid-June high. Upexi, which shifted its focus to acquiring the Solana altcoin and has received backing from Maelstrom, has lost nearly two-thirds of its market value since late April.

The risk of a market downturn for Bitcoin appears diminished, partly because it is less volatile than smaller cryptocurrencies and enjoys higher liquidity. Additionally, Michael Saylor’s Strategy, the original Bitcoin accumulator and the largest player in this arena, provides a safety net, having refrained from selling a single token in five years, now totaling around $70 billion in value.

Some influential figures in the crypto space express less optimism about newer participants. Michael Novogratz, CEO of Galaxy Digital, noted on Tuesday that the surge in new DATs likely peaked, making it increasingly challenging for new entrants to survive.

Altcoins are infamously unstable, raising the possibility of a damaging cycle of forced selling and declining prices. An index tracking smaller tokens has already experienced three cycles of fluctuations exceeding 55% this year and has dropped approximately 15% since reaching a five-month peak on July 22.

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

A key metric that market analysts observe is the enterprise value of DATs compared to their crypto holdings, referred to as mNAV. Evgeny Gaevoy, CEO of crypto market maker Wintermute, highlighted concerns that once struggling firms see their mNAV drop below 1, they may start liquidating their tokens.

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

“I believe that as we enter a bear market for altcoins, those with significant net asset value in treasury companies are likely to suffer the most,” Gaevoy commented, adding that Wintermute has invested in “a few” DATs in undisclosed deals.

Insider Trading Issues

Bankers looking to maximize fees from arranging capital for DATs are saturating the market with numerous offerings often at the expense of quality, as Vaidya pointed out. At the same time, some of these transactions have involved insiders acquiring shares in the entity and the digital asset it intends to invest in prior to public announcements, subsequently selling once the news breaks.

Certain treasury firms have seen their stock prices plunge following routine filings to officially register shares, enabling insiders to sell.

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

Investors choosing to engage in these ventures “might be wagering on short-term market excitement and fervor,” he added. “However, entering too late could leave you at a disadvantage, potentially leading to losses without any positive returns.”

© 2025 Bloomberg

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