Bitcoin’s Drop Hits Treasury Firms Hard

Yesterday, Bitcoin fell from around $70, 000 into the mid‑$60, 000s in a sharp move that is more than a single‑day blip. The slide was driven by big outflows from ETFs and gave risk assets a quick, broad hit. Liquidity has once again shown it can be thin, so investors had to act fast. Because crypto prices kept falling, a hidden trade that helped last year’s rally now opened up in the public eye. Companies that put big portions of their balance sheets into digital coins are seeing the same volatility as those tokens themselves. They have less wiggle room than before, turning a once‑glorious strategy into a rising risk factor. This new class of firms—publicly traded crypto‑treasury companies, or DATs—has used Bitcoin as a lever. The idea is simple: hold a volatile asset that can climb higher than the underlying value, attract investors, and trade at a premium. A premium becomes an extra source of capital, letting those companies raise equity money and keep adding coins to their books. In 2025, Bitcoin’s rise gave these firms momentum. As the token price climbed, so did the stock, feeding more issuance into the system. The cycle fed itself: higher share prices made it easier to issue new shares, which in turn allowed more coin buying, and demand grew across the sector. By October’s peak, Bitcoin had crossed $126, 000, a level that now looks less like a milestone and more like a turning point. Since then, it has dipped close to 50 %, hitting $63, 295. 74 briefly before settling near $63, 525. That day‑drop of 12. 6 % is the steepest since November 2022. Weekly losses reached 17 % and year‑to‑date drawdown sits around 28 %. The larger crypto market has lost roughly $2 trillion since early October, with about $800 billion erased in the last month alone. Ether also slid more than 13 % in a day to $1, 854, with its yearly loss nearing 38 %. The selloff spread quickly: around $1 billion of Bitcoin positions vanished in one day as part of a multi‑day $2. 56 billion wipeout, according to Reuters. Thin weekend liquidity magnified the move, leaving little room for orderly exits. Several forces piled on top of this trend. Earnings from big AI players disappointed traders who were already worried about stretched valuations. Microsoft’s Azure growth met expectations rather than beating them, which caused a double‑digit drop in its share price and rippled across tech. Political news—Kevin Warsh’s nomination as Fed chair—raised fears of tighter monetary conditions and a smaller balance sheet. Even traditional havens cracked: gold had its sharpest daily fall since 1983 and silver posted the worst single session on record. In that climate, crypto lost footing; DATs lost it faster. Shares of these firms have fallen by a median 62 % over the past year, far worse than Bitcoin’s 20 % drop. Many now trade below the net asset value of the coins they hold—a blunt signal that investors value liquidation more than continuation. The firm most linked to the treasury playbook, Strategy, shows the scale of this reversal.Its price dropped from $457 in July 2025 to $111. 27, the lowest level since August of the prior year. One session erased more than 11 %. In December, the company cut its 2025 outlook, warning of a possible swing from profit to a $6. 3 billion loss tied directly to Bitcoin weakness. Elsewhere, the damage looks similar: Smarter Web Company in the UK fell nearly 18 % in a day; Nakamoto Inc. slid close to 9 %; Metaplanet in Japan dropped more than 7 %. The pain spread outward as Coinbase, Circle and Robinhood all declined while investors pulled back from crypto‑linked exposure. Analysts describe a tightening loop. Falling stock prices limit DATs’ ability to raise capital. Limited capital cuts off a source of demand that helped lift prices during the rally. Lower prices feed back into weaker equity valuations. At a certain point, selling becomes the only option. Traders watching discounts widening across the sector worry that closed capital markets could force sales that accelerate losses and spread stress into exchanges, lenders and ETFs. On social media, the tone has shifted from celebration to caution. Some users describe DATs as leveraged trades dressed up as operating companies. Others predict many will disappear in 2026 as index providers reconsider inclusion and passive funds unwind positions. Meanwhile, the effects are not limited to U. S. markets. Crypto‑linked equities and retail activity in Europe and Canada followed similar patterns, showing how interconnected global crypto participation is during volatile periods. Professional investors sound equally guarded. Nic Puckrin of Coin Bureau says the market is entering a prolonged transition rather than a brief correction. Deutsche Bank points to persistent ETF outflows, more than $3 billion in January alone, following heavy redemptions late last year. Julius Baer’s Manuel Villegas Franceschi flags concern around tighter policy expectations under a new Fed chair. Jefferies strategist Mohit Kumar warns that miner liquidations and retail‑heavy ownership amplify downside risk. The data support that caution. Bitcoin’s correlation with equities has climbed from 0. 15 in 2021 to roughly 0. 75 in 2026. The asset that once marketed itself as a hedge now trades like a high‑beta risk play tied to liquidity conditions. For DATs, the question runs deeper than price. The treasury‑first model depends on confidence in rising assets and easy access to capital. That environment no longer exists. Survival may require a pivot toward operating cash flow, real revenue and balance sheets that can weather drawdowns. Some firms will adapt; others may not. This episode offers a clear lesson. Crypto treasuries magnified gains during the upswing. They magnify losses on the way down. The ripple effects now reach beyond tokens into stocks, ETFs and market structure itself. Investors tracking the next move are watching two signals closely: ETF flows and Federal Reserve messaging. Until those stabilize, pressure on crypto‑hoarding firms will unlikely ease.