Amid a recent crypto market downturn, crypto treasury companies—previously major buyers that fueled market rallies—have significantly slowed or halted their purchases, despite prices reaching potential bottom. This inaction is not due to depleted funds or panic but stems from a structural paralysis in their funding mechanisms, which rely heavily on stock premiums.

These companies, exemplified by industry leader Strategy, primarily fund crypto acquisitions through convertible notes and At-The-Market (ATM) equity offerings. The ATM mechanism allows issuing new shares at a premium to net asset value (NAV) to raise capital for buying more crypto. However, when their stock price falls below the NAV per share (mNAV < 1), selling shares becomes dilutive and economically unfeasible, effectively locking their "ammunition." Strategy, for instance, still has over $30 billion in ATM capacity but cannot utilize it while trading at a discount.

Other crypto treasury firms face similar constraints. Many have mNAV ratios below 1, rendering their ATM plans unusable. While some, like BitMine (a major Ethereum holder), continue buying using cash reserves, overall effective purchasing power is limited. The sector is shifting focus from leveraged accumulation to earning yield through staking (e.g., Ethereum staking yields ~8%) to cover interest costs and ensure survival. This reflects a broader move away from "infinite bullet" theories dependent on perpetual premiums, underscoring that these companies amplify trends rather than counteract downturns. Market recovery is essential to restart the funding flywheel.

<html><head></head><body><p>During the brief uptrend that began in April, crypto treasury companies, as the main force of market accumulation, provided a continuous stream of ammunition for the market. However, when both the crypto market and stock prices fell simultaneously, these crypto treasury companies seemed to collectively fall silent.</p>
<p>When prices hit a阶段性 bottom, it should theoretically be the perfect time for these treasury companies to buy the dip. But the reality is that buying activity has slowed or even stalled. The reason behind this collective silence is not simply because "ammunition" was exhausted at high points or due to panic, but rather because the highly premium-dependent financing mechanism has become mechanically paralyzed during the downturn, leading to a situation where "funds are available but unusable."</p>
<h3>Hundreds of Billions in "Ammunition" Locked Up</h3>
<p>To understand why these DAT companies are facing the dilemma of "having money but being unable to use it," we need to conduct an in-depth analysis of the sources of ammunition for crypto treasury companies.</p>
<p>Taking Strategy, the first listed crypto treasury company, as an example, its funding has primarily come from two sources: "convertible notes," which involve borrowing money at very low interest rates to buy cryptocurrencies, and the At-The-Market (ATM) issuance mechanism, where Strategy can sell additional shares when its stock price trades at a premium to the value of its held crypto assets, using the proceeds to buy more Bitcoin.</p>
<p>Before 2025, Strategy's main funding source was "convertible notes." As of February 2025, Strategy had raised $8.2 billion through convertible notes to purchase additional Bitcoin. Starting in 2024, Strategy began large-scale use of its At-The-Market (ATM) equity program. This issuance method is more flexible: when the stock price is higher than the market value of the held crypto assets, the company can issue additional shares at market price to raise funds for purchasing more crypto assets. In Q3 2024, Strategy announced a $21 billion ATM equity offering program, and in May 2025, it established a second $21 billion ATM program. To date, the total remaining capacity of these programs is still $30.2 billion.</p>
<p><div><img style="max-width:100%;overflow:hidden;" src="https://d1x7dwosqaosdj.cloudfront.net/images/2025-12/43652d5d40114351b4e9b5c305c0be81.jpg" alt=""></div></p>
<p>However, these capacities are not cash; they are quotas for the sale of Class A preferred shares and common shares. 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 (e.g., the stock price is $200, and each share represents $100 worth of Bitcoin), selling shares allows Strategy to exchange the newly issued shares for $200 in cash, which can then be used to buy $200 worth of Bitcoin, thereby increasing the Bitcoin backing per share. This was the logic behind Strategy's "perpetual motion machine" of seemingly infinite ammunition. However, when Strategy's mNAV (mNAV = market capitalization / value of held coins) falls below 1, the situation reverses. Selling shares now means selling at a discount. Since November, Strategy's mNAV has remained below 1 for an extended period. This is why, despite having a large number of shares available for sale recently, Strategy has been unable to use them to purchase Bitcoin.</p>
<p>Furthermore, not only has Strategy been unable to raise funds to buy the dip recently, but it also chose to raise $1.44 billion by selling shares at a discount to establish a dividend reserve pool to support preferred share dividend payments and existing debt interest payments.</p>
<p>As the standard template for crypto treasuries, Strategy's mechanism has been adopted by most treasury companies. Therefore, we can see that when crypto assets fall, the reason these treasury companies fail to enter the market to buy the dip is not unwillingness but rather because their stock prices have fallen too much, effectively "locking" their ammunition depots.</p>
<h3>Nominal Firepower Ample, Actually "Guns Without Bullets"</h3>
<p>So, besides Strategy, how much purchasing power do other companies have? After all, there are now hundreds of crypto treasury companies in the market.</p>
<p>From the current market perspective, although there are many crypto treasury companies, their potential for future purchases is not very large. There are mainly two situations. One type consists of companies that were originally crypto asset holding enterprises. Their crypto asset holdings mainly come from their existing holdings rather than new purchases financed by debt issuance. Their ability and motivation to raise funds through debt are not strong. For example, Cantor Equity Partners (CEP), ranked third in Bitcoin holdings, has an mNAV of 1.28. Its Bitcoin holdings primarily resulted from a merger with Twenty One Capital, and it has had no purchase records since July.</p>
<p>The other type consists of strategy companies similar to Strategy. However, due to the recent severe decline in stock prices, their mNAV ratios have generally fallen below 1. The ATM capacities of these companies are also effectively locked and cannot be utilized until their stock prices recover above 1.</p>
<p>Beyond issuing debt and selling stock, there is another, more direct "ammunition depot": cash reserves. Taking BitMine, the largest DAT company for Ethereum, as an example, although its mNAV is also below 1, the company has maintained its purchase plan recently. According to data from December 1st, BitMine stated it still has $882 million in unencumbered cash on its books. BitMine Chairman Tom Lee recently stated, "We believe Ethereum's price has bottomed. BitMine has resumed accumulating, purchasing nearly 100,000 ETH last week, double the amount of the previous two weeks." BitMine's ATM capacity is also substantial. In July 2025, the total capacity of its program was increased to $24.5 billion, and it currently has nearly $20 billion remaining.</p>
<p><div><img style="max-width:100%;overflow:hidden;" src="https://d1x7dwosqaosdj.cloudfront.net/images/2025-12/58e2fdaf61ee471683697b09ffaa76c9.jpg" alt=""></div></p>
<p>BitMine Holdings Change</p>
<p>Additionally, CleanSpark proposed issuing $1.15 billion in convertible bonds before the end of the year to purchase Bitcoin. The Japanese listed company Metaplanet has been a relatively active Bitcoin treasury company recently, raising over $400 million through Bitcoin-collateralized loans or share issuance since November to purchase Bitcoin.</p>
<p>In terms of total volume, the "nominal ammunition" (cash + ATM capacity) on the books of various companies amounts to tens of billions of dollars, far exceeding the previous bull market. However, in terms of "effective firepower," the actual number of bullets that can be fired has decreased.</p>
<h3>Shifting from "Leveraged Expansion" to "Yield Generation for Survival"</h3>
<p>Besides having their ammunition locked, these crypto treasury companies are also exploring new investment strategies. During the market uptrend, most companies' strategy was straightforward: buy relentlessly, obtain more financing as the price of coins and stocks rose, and then continue buying. As the situation reversed, many companies not only found it harder to raise funds but also faced the challenge of paying interest on previously issued bonds and covering operational costs.</p>
<p>Consequently, many companies are turning their attention to "crypto yield"—participating in crypto asset network staking activities to obtain relatively stable staking rewards. These rewards can then be used to pay the interest on their financing and operational costs.</p>
<p><div><img style="max-width:100%;overflow:hidden;" src="https://d1x7dwosqaosdj.cloudfront.net/images/2025-12/983d463e1e30492c9673f3ffea473a0d.jpg" alt=""></div></p>
<p>For instance, BitMine plans to launch MAVAN (a US-based validator network) in Q1 2026 to initiate ETH staking. This is expected to generate approximately $340 million in annualized revenue for BitMine. Similar approaches are seen with Upexi, Sol Strategies, and other Solana network treasury companies, which can achieve around 8% annualized yield.</p>
<p>It is foreseeable that as long as mNAV cannot return above 1.0, hoarding cash to meet debt maturities will become the main theme for treasury companies. This trend also directly influences asset selection. Since Bitcoin lacks native high yield, the accumulation by pure Bitcoin treasuries is slowing down. In contrast, Ethereum treasuries, which can generate cash flow through staking to cover interest costs, have maintained more resilient accumulation speeds.</p>
<p>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, finding yield-generating assets becomes their only lifeline for maintaining a healthy balance sheet.</p>
<p>Ultimately, the "infinite ammunition" was merely an illusion built on stock price premiums during a positive cycle. When the flywheel locks up due to trading at a discount, the market must face a stark reality: these treasury companies have always been amplifiers of trends, not saviors against them. Only when the market sentiment recovers first can the funding valves be reopened.</p>
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                                    <h5>Original link:https://www.bitpush.news/articles/7593906</h5>
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The 'Final Battle' of Crypto Treasuries: The Myth of Buying the Dip Is Collapsing

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Twenty One Capital (NYSE: XXI), a Bitcoin-focused asset reserve company backed by Tether and SoftBank, debuted on the New York Stock Exchange on December 9. Despite its strong backing and large Bitcoin holdings, its stock plunged nearly 20% on the first trading day. The company holds 43,514 BTC, making it the third-largest corporate Bitcoin holder globally, yet its market valuation sits at just $186 million—a mere 4.6% of its Bitcoin's market value.

This extreme discount stems from its reliance on "shareholder injections" rather than open-market purchases. Most of its Bitcoin came directly from Tether, raising transparency and sustainability concerns. The broader Digital Asset Treasury (DAT) model is under pressure, with most major Bitcoin-holding companies trading below their net asset value. While proponents like Michael Saylor argue Bitcoin will become a foundational asset in the digital economy, the market remains skeptical in the short term, demanding more proof of the model’s resilience.

<html><head></head><body><p><em>Original | Odaily Planet Daily (</em><em>@OdailyChina</em><em>)</em></p><p><em>Author | Ding Dang (</em><em>@XiaMiPP</em><em>)</em></p><p><div><img style="max-width:100%;overflow:hidden;" src="https://d1x7dwosqaosdj.cloudfront.net/images/2025-12/d1a2116ea1e9447f880eb80a934495a6.jpg" alt=""></div></p><p>Twenty One Capital (NYSE: XXI), a "Bitcoin asset reserve company" backed by stablecoin giant Tether and Japanese conglomerate SoftBank Group, officially listed on the New York Stock Exchange on December 9. However, in stark contrast to its resource advantages of "heavy assets" and "strong backing," the stock price plummeted immediately after the first day's opening, with a intraday drop of nearly <strong>20%</strong>. The capital market's initial report card was not friendly.</p><p>Twenty One was founded in early 2025 and is led by Strike founder and CEO Jack Mallers. It is positioned as a company with Bitcoin as its core asset allocation. It has strong backing from stablecoin issuer Tether, Japan's SoftBank Group, and Wall Street investment bank Cantor Fitzgerald.</p><p>It is important to note that Twenty One did not undergo a traditional IPO but instead completed a backdoor listing by merging with Cantor Equity Partners (a SPAC), officially listing on the NYSE on December 9. Cantor Equity Partners is a key platform under Cantor Fitzgerald. The company is headed by Brandon Lutnick, son of the U.S. Secretary of Commerce, who personally led this merger. He emphasized in the announcement that Cantor's partnership was key to engaging innovative participants like Tether and SoftBank. This relationship adds a "dimension of institutional prestige" to Twenty One Capital, especially in the context of the Trump administration's promised crypto-friendly policies.</p><p>But market sentiment is clearly more complex. The company initially under the ticker CEP saw its stock price surge from $10.2 to a high of $59.6 after the announcement, a gain of nearly 6 times. The initial enthusiasm for the "Bitcoin reserve company" narrative was almost written on the K-line chart. However, as speculative sentiment faded, the price quickly fell back and is currently hovering around $11.4, erasing almost all of the premium.</p><p>This forms an extremely strong contrast with its massive Bitcoin holdings. As of the listing, Twenty One held <strong>43,514 BTC, with a market value of approximately $4.03 billion, ranking third</strong> in the global corporate Bitcoin holdings list, behind only Strategy and MARA Holdings.</p><h2>Valuation Puzzle: Causes Behind the Extreme Discount</h2><p>What truly puzzles the market is its valuation structure. At the current stock price level, Twenty One's overall market capitalization is only about $186 million, with a market multiple (mNAV) as low as 0.046. This means the capital market is only willing to price its Bitcoin assets at about 4.6% of their book value. Why such an extreme discount?</p><p>A deep dive into its asset acquisition method reveals that Twenty One's <strong>Bitcoin reserves were not primarily formed through long-term purchases on the open market but highly relied on a "shareholder infusion" model</strong>: its initial reserve of approximately 42,000 BTC came from a direct capital injection by Tether. Subsequently, on May 14, 2025, the company added 4,812 BTC through Tether, costing about $458.7 million at the time, corresponding to a cost of about $95,300 per coin; and before the listing, it completed an additional plan to acquire about 5,800 BTC through PIPE financing and convertible bond mechanisms.</p><p>The advantage of this model is its high efficiency, avoiding the lengthy process of building positions in the secondary market and allowing for scaled-up reserves in a short time; but the cost is equally obvious: <strong>assets are highly concentrated from a few related parties, making it difficult for investors to fully penetrate its internal transaction structure, custody form, and potential agreement constraints. Transparency and sustainability naturally become important discount factors in market pricing.</strong></p><h2>Collective Dilemma of the "Digital Asset Reserve Company" Model</h2><p>From an industry perspective, Twenty One's problem is no longer an isolated case. According to defillama.com data, there are currently over 70 "crypto-stock companies" (i.e., listed companies holding crypto assets) globally. Among the top 20 holders, the mNAV of most companies has fallen below 1, including Strategy, which pioneered this model.</p><p><div><img style="max-width:100%;overflow:hidden;" src="https://d1x7dwosqaosdj.cloudfront.net/images/2025-12/bf1486b5c2934d7384d209d781afe098.png" alt=""></div></p><p>As the overall crypto market retreats, these "crypto-stock companies" have gradually retreated from being the core of the narrative to marginal assets in risk models. The current valuation of these crypto asset reserve companies has generally turned cautious.</p><p>However, there is an order of magnitude difference between Strategy and Twenty One. <strong>Strategy currently holds about 660,600 Bitcoin, accounting for about 3% of the total Bitcoin supply, a scale more than 15 times that of Twenty One.</strong> This size not only gives it stronger market influence but also a certain symbolic meaning of "systemic anchoring." When Strategy's mNAV falls below 1, the market naturally raises deeper questions: Will it be forced to sell coins? Could its debt structure trigger a stampede? Has the DAT model lost its logical foundation in the face of the macro cycle?</p><p>In fact, with the significant retreat of the crypto market in 2025, the DAT model faces severe tests. The core of this model is to accumulate Bitcoin through debt and equity financing, treating it as the "ultimate asset" to hedge against inflation and currency devaluation. But when Bitcoin's price volatility significantly amplifies, the stability of this model begins to waver. Some companies, despite holding large amounts of BTC, face valuation pressure due to operational costs and market sentiment. <strong>Twenty One's extreme discount, while related to its asset acquisition method, is also a concentrated reflection of the market's risk pricing for the entire DAT model.</strong></p><h2>Conclusion: The Narrative Remains, But the Market Needs Time</h2><p>At the Binance Blockchain Week on December 4, Michael Saylor provided a broader perspective. In his speech titled "Why Bitcoin Remains the Ultimate Asset: The Next Chapter of Bitcoin," he reiterated his core judgment about Bitcoin's next decade: Bitcoin is transitioning from an investment product to the "basic capital" of the global digital economy, and the rise of the digital credit system will reshape the traditional $300 trillion credit market. From policy shifts and changes in bank attitudes, to the institutional absorption of ETFs, and the explosive growth of digital credit tools, Saylor描绘s a new financial order accelerating into being: digital capital provides energy, digital credit provides structure, and Bitcoin will become the underlying asset supporting it all.</p><p>From this perspective, companies like Twenty One do possess a potential for being "<strong>correct in the long term</strong>"—if Bitcoin ultimately completes its migration from a high-risk asset to "digital gold," then these companies may become core carriers in this migration process.</p><p>But the problem is, "correct in the long term" does not automatically equate to "reasonably priced in the present." <strong>The market still needs time to verify Bitcoin's true role in the macro system, and it also needs time to reassess the resilience of the DAT model under different cycle conditions.</strong></p><p>Related reading: "Full Text of Saylor's Dubai Speech: Why Bitcoin Will Become the Underlying Asset of Global Digital Capital"</p></body></html>

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