DAT Firms Sell Crypto to Save Their Stocks: Is This Sustainable?

Digital asset treasury (DAT) companies are increasingly forced to sell their cryptocurrency holdings, such as Ethereum, to support their collapsing stock prices, which are trading significantly below their net asset value (NAV). FG Nexus sold $32.7 million in ETH to fund a share buyback after its stock fell 94% in four months, mirroring similar actions by ETHZilla. This practice arises when a company's stock trades below its crypto holdings' value (mNAV below 1.0), prompting shareholders to demand management realize that hidden value via buybacks, which requires cash often sourced from crypto liquidation.

These DAT firms, which managed $42.7 billion in crypto in 2025, often employ leveraged structures like convertible notes and perpetual preferred equity, amplifying market pressure during crypto price reversals. The resulting forced selling exacerbates market liquidity issues; analysts estimate that liquidation of 10% to 15% of treasury positions could equal billions in selling pressure. The trend reverses the prior positive cycle where corporate buying supported prices, signaling systemic stress in the corporate crypto treasury model, raising questions about its long-term sustainability without stricter risk management or regulatory oversight.

(Source：BeInCrypto)