Original Title: "Saylor model struggles as crypto treasury hype turns to doubt"

Written by: OLGA KHARIF, DAVID PAN, FORTUNECRYPTO

Translated by: J1N, Techub News

The cryptocurrency asset treasury model (DATs) inspired by Michael Saylor is facing severe challenges. These publicly traded companies, primarily engaged in purchasing cryptocurrencies, were once seen as a favorable way for investors to participate in the cryptocurrency asset boom, but now they are struggling amid falling stock prices and waning market confidence. At the same time, complex financing tools have increased operational risks, while tightening regulations and the requirement for shareholder approval for new stock issuances have further impacted their core financing model.

In fact, the current state of cryptocurrency asset treasury companies (Digital Asset Treasury, abbreviated as DAT) was not difficult to foresee. Stock prices rose too quickly, the narrative became too grand, and the financial logic became increasingly "absurd." Newly emerged companies, after going public, almost exclusively engaged in one activity: frantically buying cryptocurrency assets. Once viewed as a shortcut for investors to enter the crypto boom, the issue now, with falling stock prices and shaken market confidence, is not whether this model is under pressure, but in what manner and to what extent it will gradually "burst."

Even with the anticipated interest rate cuts by the Federal Reserve driving up the prices of stocks and corporate bonds, the stock prices of cryptocurrency asset treasury companies have continued to decline, and token prices have also been on a downward trend. According to data from Architect Partners tracking 15 DATs, the average stock price fell by 15% last week.

Individual stock performances have been even more severe. ALT5 Sigma Corp., which holds the WLFI token issued by Trump-related World Liberty Financial, dropped about 50% in just over a week; Kindly MD Inc., a healthcare provider holding Bitcoin through its subsidiary Nakamoto Holdings, has seen its stock price fall by 80% from its May peak. Other DATs associated with Ethereum and Solana have also experienced significant declines, leading to a reduction in the book value of their tokens.

Ed Chin, co-founder of Parataxis Capital, stated, "In the U.S., there are too many of these companies, and the level of differentiation is very low."

Currently, more than 100 companies have incorporated cryptocurrencies into their balance sheets, most of which launched this year. Many small companies have rapidly transformed, rebranding from Japanese nail salons, cannabis vendors, to marketing agencies, all jumping on the "cryptocurrency asset treasury" bandwagon.

Nevertheless, the speculative frenzy has not completely subsided. Eightco Holdings Inc. saw its stock price surge over 3,000% in a single day after announcing plans to purchase Worldcoin and appointing Wall Street analyst Dan Ives to its board.

For some investors, this model remains attractive: packaging cryptocurrencies through publicly traded companies, providing exposure to cryptocurrency assets in stock form, and allowing for leverage. However, this "crowded trade" is gradually eroding investor confidence. Many companies have little business beyond holding tokens, and as stock prices decline, the confidence supporting the premium is also wavering. Notable DAT companies like Strategy and Japan's Metaplanet Inc. have also seen significant stock price declines recently, indicating that even market leaders struggle to withstand shifts in sentiment.

Data also reflects signs of decline in this model. CryptoQuant data shows that in August, digital asset treasury companies purchased only 14,800 Bitcoins, a sharp drop from 66,000 in June. Meanwhile, the average purchase size has also significantly shrunk, decreasing by 86% from the peak in 2025 to just 343 Bitcoins last month. The cumulative growth rate of Bitcoin holdings by treasury companies has plummeted from 163% in March to just 8% in August.

To acquire more funds for purchasing cryptocurrencies, DATs have begun adopting more complex financing strategies. Crypto lending institutions, brokers, and derivatives trading desks have built a financing ecosystem specifically for treasury companies, including Bitcoin collateralized loans, token-linked convertible bonds, and structured payment tools.

For example, London-based web design company Smarter Web issued bonds linked to the value of Bitcoin rather than pounds, meaning that as Bitcoin rises, the company's debt also increases. CEO Andrew Webley stated that he believes the bond only accounts for 5% of the company's treasury, and the risk is manageable, but such innovative financial instruments actually layer new risks on top of volatile assets.

Another company, DDC Enterprise Ltd., originally in the food service industry, raised over $1 billion through complex debt, equity lines, and shelf offerings, but its stock price quickly fell after a surge.

Meanwhile, Nasdaq has begun requiring some token-holding companies to obtain shareholder approval before issuing new shares to finance token purchases. The "selling shares to buy tokens" strategy is precisely the core financing method of DATs.

Strategy and Japan's Metaplanet Inc. are the most well-known DATs, having seen their stock prices soar over the past year, but they have also recently experienced declines, indicating that even the leaders cannot withstand shifts in market sentiment. The industry is even discussing mergers and consolidations, with stronger players potentially acquiring the token assets of weaker ones.

Strategy was removed from the S&P 500 index adjustment last Friday, despite meeting the criteria. Since April, its stock price has remained relatively stagnant, and even with Bitcoin's rebound, its Bitcoin market value multiple (mNAV) has dropped to around 1.5. The company recently raised funds through an ATM to purchase only $217 million worth of Bitcoin, below market expectations.

On the other hand, crypto lending institutions are accelerating their positioning. Two Prime CEO Alexander Blume stated that DATs have become one of the main customer groups for Bitcoin collateralized loans, with individual loan sizes typically ranging from $10 million to $500 million, and the current active loan scale has reached $1.25 billion. The company has also launched a new structure of "one-time principal repayment at maturity," eliminating monthly interest payments to give borrowers more room in a volatile market.

Blume stated, "Bitcoin treasury companies are a key focus for our business growth," adding, "Over the past year, we have witnessed an increasing demand for financing."

As for how far this financing ecosystem can go, there is currently no conclusion. However, it can be anticipated that there may not be a sudden collapse, but rather a "chronic retreat" characterized by declining stock prices and stagnation in token purchases.

Some investors have begun to question: why hold cryptocurrency assets indirectly through companies that layer fees, risks, and equity dilution, rather than buying tokens directly or through ETFs? Travis Kling, Chief Investment Officer of Ikigai Asset Management, expressed skepticism about the entire model: "I have been trying to convince myself to buy some DATs, but I have not succeeded and probably never will." He believes this model "feels like the last gasp of a cycle, and I can't think of anything more absurd than this approach."

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