Public companies that heavily invested in cryptocurrencies are now facing significant financial losses. The once promising investment strategy has seen share prices plummet, leaving firms grappling with the aftermath.
What Happened: Companies that converted their corporate cash into Bitcoin (CRYPTO: BTC) or other digital tokens, inspired by Michael Saylor‘s Strategy Inc., have experienced a severe reversal in fortunes. Digital asset treasuries (DATs) were a popular trend in the first half of 2025, causing share prices to soar.
One such firm, SharpLink Gaming Inc., witnessed its stock surge over 2,600% after declaring a shift to buying Ethereum tokens. However, the stock has since dropped 86% from its peak, reducing the company’s value to less than its digital token holdings.
Bloomberg reports that the median stock price of US and Canadian-listed companies that transitioned to DATs has decreased by 43% this year. The worst hit were those that invested in smaller, more volatile tokens.
Analysts believe the downfall is due to the non-existent yield from these holdings. “Investors took a look and understood that there’s not much yield from these holdings rather than just sitting on this pile of money, and that’s why they contracted,” B. Riley Securities Analyst Fedor Shabalin told the outlet.
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With most DATs’ crypto holdings failing to generate any cash flow, these companies are now finding it difficult to make interest and dividend payments on the debt they incurred to purchase the tokens. This has resulted in a decrease in investor enthusiasm and a decline in capital raising opportunities.
Despite the downturn, some DATs are contemplating acquisitions of smaller DATs that are worth less than their holdings, suggesting potential future activity in this sector.
Why It Matters: The downfall of DATs underscores the risks associated with heavy investment in volatile assets like cryptocurrencies. Companies that jumped on the crypto bandwagon, inspired by early successes, are now facing the harsh reality of a market downturn.
With no yield from these holdings and a struggle to meet debt obligations, these companies are facing a crisis of investor confidence.
The potential for acquisitions of smaller DATs indicates that despite the losses, there may still be some belief in the long-term potential of digital assets. However, the immediate future looks challenging for these firms.