The fundraising flywheel has stalled, and crypto treasury companies are losing their ability to buy the dip.

Original Title: "Struggle of the Trapped Beasts": Crypto Treasury Companies Are Losing Their Bottom-Fishing Ability

Original Author: Frank, PANews

 

During the brief rally that began in April, crypto treasury companies acted as the main force increasing their holdings in the market, providing a continuous stream of ammunition. However, when both the crypto market and stock prices plummeted, these crypto treasury companies seemed to collectively fall silent.

When prices hit a short-term bottom, it would logically be the perfect time for these treasury companies to buy the dip. But in reality, buying activity slowed down or even stalled. The reason behind this collective silence is not simply because their "ammunition" ran out at the top or due to panic, but rather because the financing mechanism, which heavily relies on premiums, experienced a systemic paralysis of "having money but being unable to use it" during the down cycle.

Hundreds of Billions in "Ammunition" Locked Up

To understand why these DAT companies are facing the dilemma of "having money but being unable to use it," we first need to analyze the sources of ammunition for crypto treasury companies in depth.

Taking Strategy, currently the leading crypto treasury stock, as an example, its funding sources have always come from two main directions: one is "convertible notes," that is, issuing bonds at extremely low interest rates to borrow money to buy crypto. The other is the ATM (At-The-Market) issuance mechanism, which allows Strategy to issue new shares to raise funds to buy bitcoin when its stock price trades at a premium to its crypto holdings.

Before 2025, Strategy's main source of funds was "convertible notes." As of February 2025, Strategy had raised $8.2 billion through convertible notes to purchase more bitcoin. Starting in 2024, Strategy began to use the At-The-Market (ATM) equity issuance plan on a large scale. This method is more flexible: when the stock price is higher than the market value of its crypto holdings, it can issue shares at market price to buy more crypto assets. In Q3 2024, Strategy announced a $21 billion ATM equity issuance plan, and in May 2025, it established a second $21 billion ATM plan. As of now, the total remaining quota for these plans is still $30.2 billion.

However, these quotas are not cash, but rather the quota for Class A preferred shares and common shares to be sold. For Strategy, to convert these quotas into cash, it needs to sell these shares on the market. When the stock price is at a premium (for example, the stock price is $200, and each share contains $100 worth of bitcoin), selling shares is equivalent to converting the newly issued shares into $200 in cash, and then buying $200 worth of bitcoin, increasing the bitcoin per share. This was the previous "infinite ammunition" flywheel logic for Strategy. However, when Strategy's mNAV (mNAV = market cap / value of crypto holdings) falls below 1, the situation reverses: selling shares means selling at a discount. Since November, Strategy's mNAV has been below 1 for a long time. Therefore, even though Strategy has a large number of shares available for sale during this period, it cannot use them to buy bitcoin.

Moreover, not only has Strategy been unable to pull out funds to buy the dip recently, it has also chosen to raise $1.44 billion by selling shares at a discount, setting up a dividend reserve pool to support preferred share dividend payments and existing debt interest payments.

As the standard template for crypto treasuries, Strategy's mechanism has also been adopted by most treasury companies. Therefore, when crypto assets fall, the reason these treasury companies do not buy the dip is not due to reluctance, but rather because the stock price has fallen too much and the "ammunition depot" is locked.

Nominal Firepower Is Sufficient, but in Reality "Guns Without Bullets"

So, apart from Strategy, how much purchasing power do other companies have? After all, there are now hundreds of crypto treasury companies in the market.

From the current market perspective, although there are many crypto treasury companies, their subsequent purchasing potential is not large. There are mainly two types of situations: one is companies that are originally crypto asset holding enterprises, whose crypto holdings mainly come from their own reserves rather than new purchases through debt issuance, and their ability and motivation to raise funds through debt are not strong, such as Cantor Equity Partners (CEP), which ranks third in bitcoin holdings with an mNAV of 1.28. Its bitcoin holdings mainly came from a merger with Twenty One Capital, and there have been no new purchases since July.

The other type is companies that adopt a strategy similar to Strategy, but due to the recent sharp decline in stock prices, their mNAV values have generally fallen below 1. The ATM quotas of these companies are also locked, and unless the stock price recovers above 1, the flywheel cannot spin again.

Besides issuing debt and selling shares, there is also the most direct "ammunition depot": cash reserves. Take BitMine, the largest DAT company for Ethereum, as an example. Although its mNAV is also below 1, the company has still maintained its buying plan recently. According to data from December 1, BitMine stated that it still had $882 million in unsecured cash on hand (UTC+8). BitMine chairman Tom Lee recently said, "We believe the price of Ethereum has bottomed out. BitMine has resumed increasing its holdings and bought nearly 100,000 ETH last week (UTC+8), double the amount of the previous two weeks." BitMine's ATM quota is also staggering. In July 2025, the total quota for the plan was raised to $24.5 billion, with nearly $20 billion still available.

BitMine Position Changes

In addition, CleanSpark announced at the end of November that it would issue $1.15 billion in convertible bonds within the year to purchase bitcoin. Japanese listed company Metaplanet has also been an active bitcoin treasury company recently, raising more than $400 million since November through bitcoin-backed loans or stock issuance to buy bitcoin.

In total, the "nominal ammunition" (cash + ATM quota) on the books of each company amounts to hundreds of billions of dollars, far exceeding the last bull market. But in terms of "effective firepower," the actual bullets that can be fired have decreased.

From "Leverage Expansion" to "Seeking Yield for Survival"

Besides their ammunition being locked, these crypto treasury companies are now also starting to adopt new investment strategies. During the market uptrend, most companies had a very simple strategy: buy blindly, raise more funds as crypto and stock prices rose, and continue buying. But as the situation has changed, many companies are not only finding it harder to raise funds, but also have to face the challenge of paying interest on previously issued bonds and covering operating costs.

Therefore, many companies have begun to focus on "crypto yield," that is, participating in crypto asset network staking activities to earn relatively stable staking returns, and using these returns to pay the interest and operating costs required for financing.

Among them, BitMine plans to launch MAVAN (Mainland American Validator Network) in Q1 2026 to start ETH staking. It is expected that this could bring BitMine $340 million in annualized revenue. Similarly, there are companies like Upexi and Sol Strategies, which are Solana network treasury companies, capable of achieving about 8% annualized returns.

It is foreseeable that as long as mNAV cannot return above 1.0, hoarding cash to deal with maturing debt will become the main theme for treasury companies. This trend also directly affects asset selection. Since bitcoin lacks native high yields, pure bitcoin treasuries are slowing down their accumulation, while Ethereum, which can generate cash flow through staking to cover interest costs, has maintained resilience in treasury accumulation.

This shift in asset preference is essentially a compromise by treasury companies in the face of liquidity difficulties. When the channel for obtaining cheap funds through stock price premiums is closed, seeking yield-generating assets becomes their only lifeline to maintain a healthy balance sheet.

In the end, "infinite ammunition" is nothing more than a pro-cyclical illusion built on stock price premiums. When the flywheel is locked due to discounts, the market must face a cold reality: these treasury companies have always been amplifiers of trends, not saviors against the tide. Only when the market warms up first can the valve of funds be reopened.

 

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