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

Core Viewpoint

2025-12-08 17:00:00

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The financial company seems to have ample ammunition, but after the stock price premium disappears, the financing chain breaks, and it is losing its ability to bottom-fish.

Original Title: "The Struggle of a Cornered Beast" Crypto Treasury Companies Are Losing Their Bottom-Fishing Ability

Original Author: Frank, PANews

During the brief rally that began in April, crypto treasury companies served as the main force for market accumulation, providing a continuous supply of ammunition. However, when the crypto market faced a double whammy of price drops and stock declines, these treasury companies seemed to collectively fall silent.

When prices reach a temporary bottom, it should theoretically be the moment for these treasury companies to buy in. Yet, the reality is that buying activity has slowed down or even come to a halt. This collective silence is not simply due to "ammunition" being exhausted at high points or panic emotions taking over, but rather a systemic paralysis of the highly leveraged financing mechanism that relies on premiums, rendering them "unable to use their money" during the downturn.

Hundreds of Billions of "Ammunition" Locked Up

To understand why these DAT companies are facing the dilemma of "unable to use their money," we need to conduct an in-depth analysis of the sources of ammunition for crypto treasury companies.

Taking Strategy, the leading crypto treasury company, as an example, its funding has historically come from two main sources: one is "convertible notes," which involve issuing bonds at extremely low interest rates to borrow money to buy coins. The other is the At-The-Market (ATM) issuance mechanism, where the company can issue additional shares to raise funds to buy Bitcoin when its stock price is at a premium relative to its held crypto assets.

Before 2025, Strategy's primary funding source was "convertible notes." As of February 2025, Strategy had raised $8.2 billion through convertible notes to increase its Bitcoin holdings. Starting in 2024, Strategy began to adopt a large-scale ATM equity issuance plan, which is more flexible compared to the previous method. When the stock price exceeds the market value of the held crypto assets, the company can issue additional shares at market price to purchase crypto assets. In the third quarter of 2024, Strategy announced a $21 billion ATM equity issuance plan, followed by a second $21 billion ATM plan established in May 2025. Currently, the total remaining quota of this plan is still $30.2 billion.

However, these quotas are not cash but rather the quota for Class A preferred shares and common stock awaiting sale. For Strategy, converting these quotas into cash requires selling these stocks in the market. When the stock price is at a premium (for example, if the stock price is $200 and each share contains $100 worth of Bitcoin), selling shares allows Strategy to convert the newly issued shares into $200 cash, which can then be used to buy $200 worth of Bitcoin, thereby increasing the Bitcoin content per share. This was the previous logic of Strategy's infinite bullets. However, when Strategy's mNAV (mNAV = Market Capitalization / Value of Held Coins) data falls below 1, selling shares results in a discounted sale. After November, Strategy's mNAV data has remained below 1 for an extended period. Thus, during this time, although Strategy has plenty of sellable stocks, it cannot purchase Bitcoin.

Moreover, not only has Strategy been unable to free up funds to buy in recently, but it has also chosen to raise $1.44 billion by selling shares at a discount to establish a dividend reserve pool to support preferred stock dividend payments and existing debt interest payments.

As a standard template for crypto treasuries, Strategy's mechanism has also been adopted by most treasury companies. Therefore, we can see that when crypto assets decline, the reason these treasury companies have failed to enter the market to buy in is not unwillingness but rather because the stock prices have dropped too much, locking up the "ammunition depot."

Sufficient Nominal Firepower, Actual "Guns Without Bullets"

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

From the current market perspective, although there are many crypto treasury companies, their subsequent purchasing potential is not substantial. There are mainly two situations: one type consists of companies that originally belong to crypto asset holding enterprises, and their crypto asset quantities mainly come from their own holdings rather than new purchases through bond issuance. Their ability and motivation to finance through bond issuance are not strong, such as Cantor Equity Partners (CEP), which ranks third in Bitcoin holdings with an mNAV of 1.28. Its Bitcoin quantity mainly comes from a merger with Twenty One Capital, and there have been no purchase records since July.

The other type consists of companies that adopt strategies similar to Strategy, but due to recent severe stock price declines, their mNAV values have generally fallen below 1. The ATM quotas of these companies are also locked up, and they can only resume operations once the stock price rises above 1.

In addition to bond issuance and stock sales, there is another more direct "ammunition depot," which is cash reserves. Taking BitMine, the largest DAT company for Ethereum, as an example, although its mNAV is also below 1, the company has still maintained a buying plan recently. According to data from December 1, BitMine stated that it still has $882 million in unsecured cash on hand. BitMine's chairman, Tom Lee, recently stated, "I believe Ethereum's price has bottomed out, and BitMine has resumed accumulation, purchasing nearly 100,000 ETH last week, which is double that of the previous two weeks." BitMine's ATM quota is also staggering; in July 2025, the total quota of this plan was raised to $24.5 billion, with nearly $20 billion remaining.

BitMine Holdings Changes

Additionally, CleanSpark proposed at the end of November to issue $1.15 billion in convertible bonds within the year to purchase Bitcoin. The Japanese listed company Metaplanet has been a relatively active Bitcoin treasury company recently, having raised over $400 million since November through Bitcoin collateralized loans or stock issuance.

In total, the "nominal ammunition" (cash + ATM quotas) on the books of various companies amounts to hundreds of billions of dollars, far exceeding the previous bull market. However, in terms of "effective firepower," the actual bullets that can be fired have decreased.

Shifting from "Leverage Expansion" to "Yield Seeking for Survival"

In addition to ammunition being locked up, these crypto treasury companies are also starting to adopt new investment strategies. During the market's upward phase, most companies had a very simple strategy: mindlessly buying in, obtaining more financing as the prices of coins and stocks rose, and then continuing to buy. However, as the situation has changed, many companies are facing not only increased difficulty in financing but also the need to deal with interest payments on previously issued bonds and operational costs.

As a result, many companies have begun to shift their focus to "crypto yields," participating in network staking activities of crypto assets to obtain relatively stable staking returns, and using these returns to pay the interest and operational costs required for financing.

Among them, BitMine plans to launch MAVAN (the U.S. native validator network) in the first quarter of 2026 to initiate ETH staking. This part is expected to bring BitMine an annualized return of $340 million. Similar companies include Upexi and Sol Strategies in the Solana network, which can achieve approximately 8% annualized returns.

It is foreseeable that as long as mNAV cannot return to above 1.0, accumulating cash to cope with debt maturity will become the main theme for treasury companies. This trend also directly affects asset selection. Due to Bitcoin's lack of inherent high yield, the accumulation of pure Bitcoin treasuries has slowed down, while Ethereum, which can generate cash flow through staking to cover interest costs, has maintained resilience in its treasury accumulation speed.

This shift in asset preference is essentially a compromise by treasury companies to address liquidity dilemmas. 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.

Ultimately, "infinite bullets" are merely a cyclical illusion built on stock price premiums. When the flywheel is locked due to discounts, the market must confront a harsh reality: these treasury companies have always been amplifiers of trends, not saviors against the tide. Only when the market begins to warm up again can the flow of funds be reopened.