The Crypto Treasury Model Faces a Crucial Test in 2026
The cryptocurrency market has experienced a significant downturn, with the total market capitalization of all cryptocurrencies falling by over 30% in the past three months. This sharp decline poses serious challenges for crypto treasury firms, which gained popularity last year when prices were on an upward trajectory. These companies often raise capital through equity or convertible debt to purchase digital assets.
Also known as digital asset treasuries (DATs), many of these firms hold Bitcoin, while some have also focused on Ethereum and Solana. However, the value of their crypto holdings has plummeted, leaving many of them underwater. As a result, they may need to sell their crypto this year to manage their debts. Additionally, investors might shift their focus towards cryptocurrency ETFs, which could further impact the crypto treasury model.
1. Crypto Treasuries May Be Forced to Sell Their Holdings
Crypto treasury firms have adopted various strategies, and each approach can significantly affect their ability to survive a prolonged market slump. There is a substantial risk that companies will be unable to refinance their debt or face margin calls on leveraged positions. If forced to sell their crypto, this could push prices lower, creating a downward spiral.
MicroStrategy, formerly known as MicroStrategy, was one of the pioneers of the DAT model and has insisted it will not sell its crypto, even though its market cap is currently lower than the value of its Bitcoin holdings. On the other hand, Mara Holdings may soon sell some of its Bitcoin. Its market cap is $3.05 billion, while its Bitcoin is worth $3.69 billion. On-chain data shows that Mara recently moved almost 1,400 BTC to wallets and exchange addresses, which could signal it is preparing for a sale.
BitMine Immersion Technologies, an Ethereum-focused crypto treasury company, is sitting on around $7.5 billion in unrealized paper losses. The company raised money through private investment in public equity (PIPE) deals, which can dilute stock value. BitMine’s stock has declined by almost 60% in the past six months. Despite this, the company recently bought more Ethereum and claims it can weather the current price slump. However, the company remains in a precarious position, and its future depends heavily on how long the price slump continues.
2. Crypto ETFs Could Challenge Digital Asset Treasuries
Crypto ETFs and DATs both offer alternative ways for investors to gain exposure to cryptocurrency. Some investors prefer not to open accounts on crypto exchanges or deal with the complexities of storing their assets. Crypto treasury firms carry more risk than passively managed ETFs, including potential losses if the company or fund liquidates.
Initially, one of the attractions of DATs was the features they offered, such as staking and leverage, which were not available in ETFs. Staking allows investors to earn yield on certain cryptocurrencies. However, this is changing. The SEC has already approved several altcoin ETFs and leveraged ETFs, albeit with limited leverage. It is likely that staking ETFs will be approved this year.
The Future of Cryptocurrency Remains Uncertain
The future of cryptocurrency is difficult to predict because it is still a relatively new and untested asset class. However, it appears that crypto treasuries will face pressure in 2026, especially if the current slump continues. For crypto investors, the implications are significant, as any downturn could impact the entire ecosystem.
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Emma Newbery has positions in Ethereum and Solana. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.