Original Author: Eric, Foresight News
The recently concluded earnings season delivered a seemingly devastating report card for crypto treasury companies (DAT). Strategy posted a net loss of $8.22 billion in Q2, with $8.32 billion coming from fair value markdowns on its Bitcoin holdings; Strive reported a net loss of $258 million, over 90% of which stemmed from the price drops of Bitcoin and its holdings of STRC preferred shares; Sharplink incurred a net loss of $394 million; Metaplanet saw a net loss of 182.8 billion yen (approximately $1.15 billion) for the first half of the year, with about $430 million in Q2 alone; Bitmine, whose fiscal year ends in August, reported a net loss of $83.6 million only for the March to May fiscal quarter, but its cumulative net loss over the past nine months has exceeded $9 billion. Combined, these five companies recorded a net loss of roughly $10 billion in Q2 and over $30 billion for the first half of the year.
A year ago, such financial statements would have triggered a panic sell-off. But the actual scene that unfolded was quite different. On the day Strategy released its earnings, its stock price closed up 4.73%, while the options market had originally priced in an 8% two-way volatility. From the lows at the end of June, Bitmine rebounded about 36%, Sharplink rebounded about 37%, Strategy and Strive rose over 10%, and Metaplanet also recovered about 15% from its late June low.
The Losses Are Real, But Already Priced In
Everyone knew that the Q2 earnings of DAT companies would be massive losses, the only question was whether it was $10 billion or $9.9 billion.
Major DAT companies have their own dashboards, or at least there are people continuously tracking the relevant data. Every fundraising event, every Bitcoin/Ethereum purchase or sale, is scrutinized under a magnifying glass by the world. Therefore, how much was lost in Q2 was visible to everyone in the market; the earnings report merely confirmed what had already happened.
What prompted the "bottoming out and rebound" in these DAT company stock prices was more a return to rationality by both the market and the companies themselves.
In Q2, Strategy raised $8.4 billion in a single quarter, surpassing any quarter last year; in May, it repurchased $1.5 billion in convertible bonds at 92% of face value, reducing the total convertible bond amount from $8.2 billion to $6.7 billion; its USD reserves increased to $3.75 billion, sufficient to cover 2.1 years of preferred stock dividends and interest; Sharplink, meanwhile, completed a $75 million private placement in June at a price higher than its net asset value, while repurchasing its own shares at an average price of $4.70.
In their performance guidance and earnings calls, most of these companies, without prior agreement, pointed in the same direction: focusing on increasing the "content" of crypto assets per share.
Last year, DAT companies told a growth story; whoever bought coins faster saw their stock rise. This year, with the tide receding, the surviving companies have all shifted their KPI to the same metric: the amount of crypto assets corresponding to each share. Strategy saw a 5% quarter-over-quarter increase in Bitcoin per share in Q2; Metaplanet's Bitcoin holdings per thousand fully diluted shares grew 9.6% in the first half; Sharplink repeatedly emphasized the increase in ETH per share.
Accompanying this goal is discipline. Metaplanet explicitly implements a capital allocation policy: issuing shares to buy coins when mNAV is above 1x, stopping issuance and turning to preferred shares and credit instruments, or even repurchasing shares when mNAV falls below 1x. In Q2, precisely because its mNAV dropped below 1x, the company proactively abandoned a third-party private placement, preferring to slow down the growth rate of its holdings rather than dilute shareholders at a discount. Sharplink and Strategy also initiated buybacks. Treasury companies are no longer expanding mindlessly but are returning to a simple question: how to increase the amount of crypto backing each share.
Strategy went as far as risking breaching its "never sell coins" promise to achieve this goal, and its stock price also experienced the smallest rebound among mainstream DAT companies. This is the necessary growing pain of transitioning from "irrational exuberance" to rationality.
Apprentices of the STRC Model
The new tool for achieving this goal is STRC, a perpetual preferred stock pegged to a $100 face value with monthly dividend adjustments, invented by Strategy in July last year. The logic is simple: attract yield-seeking capital with an annualized dividend of around 12%, and then convert the money into Bitcoin. By the end of Q2 this year, the nominal size of STRC had ballooned from $2.8 billion at the beginning of the year to $10.5 billion, with institutional funds holding it increasing from $1.1 billion to $3.1 billion, now accounting for 29%.
Imitators are lining up. Strive's SATA raised the dividend rate to 13% and, on June 16, became the first security in US stock market history to pay dividends every business day, having paid dividends consecutively 44 times by early August, with its price consistently hovering near face value. The company also took the opportunity to repay all its debt. Bitmine issued BMNP perpetual preferred shares with a 9.5% dividend in June, raising $274 million. Metaplanet's MERCURY preferred shares have issued 21.2 billion yen, and although new varieties like MARS have been delayed due to Japanese market dividend habits, it launched a "BitBonds" social bond plan in August with an annual interest rate above 4%, exploring a local version of digital credit.
Among the five, Sharplink is the only one not yet on this path. It chose another route, staking nearly all of its 890,000 Ethereum, using native yields and on-chain funds to compound the snowball, including partnering with Galaxy on an on-chain yield fund with a committed capital of $125 million. But this, in essence, does not contradict the goal of increasing crypto holdings per share.
The Premium Will Fade, the Fundification Will Remain
Of course, the flip side of the return to rationality is the fading of the premium. Strategy's mNAV once fell below 1x in June; Sharplink's market capitalization remains below the value of its Ethereum holdings; Metaplanet was forced to contract fundraising due to trading at a discount. The downward shift in the premium center of DAT stocks relative to their held crypto assets is likely an irreversible trend.
Even if a bull market returns tomorrow, the market, having learned its lesson, may not lose its mind again.
But this does not mean the model is ending; it means the model is becoming clear. Stripped of the narrative, DAT companies are essentially actively managed, levered thematic funds that profit from the long-term compound growth of the holdings per share. Such products naturally have their buyers. 13F filings show that among the top 15 institutional shareholders of MSTR in Q1 this year, 13 increased their holdings during the decline, adding a combined $4.6 billion, with Capital International alone adding $1.92 billion; Jane Street expanded its MSTR holdings by 473% in Q4 last year. Bitmine has Founders Fund and ARK behind it, and Sharplink's institutional ownership ratio rose from 6% to 46% within a year.
A quarter with a $10 billion loss did not kill DAT; instead, it knocked it from frenzy back into being a business. When falling coin prices no longer scare away shareholders, and when companies start meticulously calculating for the tiny amount of crypto behind each share, this industry has truly come of age.
