Corporate Bitcoin treasury firms are beginning to sell their holdings after months of aggressive accumulation, as deteriorating market conditions and heightened risk-off sentiment change the economics of holding crypto. Falling valuations and volatile prices are prompting firms to rethink their positions, potentially creating a vicious cycle for digital assets, according to a Financial Times report on Wednesday, November 26.
Leveraged treasury models under pressure
Companies such as Strategy, one of the largest corporate holders of Bitcoin (BTC), have historically relied on a feedback loop: buying crypto to boost their stock price, then using the elevated shares to acquire more digital assets.
This loop is now under strain, as shares of Strategy, Metaplanet, and other major treasury firms trade below the net asset value of their crypto holdings. Strategy, for example, holds $56 billion in Bitcoin, while its market capitalization stands at just $49 billion.
Fire sale risk looms
The combination of risk-off sentiment and leveraged positions is pushing treasury firms toward selling crypto to repurchase their own shares. Analysts warn that such activity could have significant market consequences, potentially triggering a downward spiral where declining stock prices depress crypto prices further.
“There’s going to be a fire sale at these companies; it’s going to get worse,” said Adam Morgan McCarthy, senior research analyst at crypto data firm Kaiko. “It’s a vicious cycle. As soon as the prices start tanking, it’s a race to the bottom.”
Selective selling expected
Not all treasury firms are expected to liquidate assets. Strategy, in particular, has permanently reduced its Bitcoin holdings and historically sold only briefly for tax purposes. Nevertheless, if market conditions remain weak, broader selling pressure could be inevitable, creating risks for both corporate balance sheets and the wider crypto market.
