Crypto Treasury Sell-Offs Amplify Market Downturn
Crypto treasury companies, or digital asset treasuries (DATs), have intensified the recent crypto market downturn through mass sell-offs. Using leverage, debt and equity raises, over 200 DATs built large Bitcoin and Ethereum positions, only to exit en masse when prices wavered.
Their aggressive selling drove Bitcoin down nearly 5% to around $101,500 and Ethereum off about 6%, pushing the global market cap to $3.62 trillion. Many crypto treasury companies prioritized rapid profits with high legal and advisory fees over product development, resulting in governance issues and investor mistrust.
Data shows 207 firms hold more than 1 million BTC and 70 control over 6 million ETH. As weaker treasuries exit or pivot to other Web3 areas, analysts expect consolidation under stronger players. Traders should factor DAT behavior and forced sell-offs into risk management amid heightened market volatility.
Bearish
The news is bearish for both Bitcoin and Ethereum. In the short term, aggressive, leveraged sell-offs by more than 200 DATs have applied direct downward pressure, driving BTC nearly 5% lower and ETH around 6%. These forced exits increase market volatility and raise risk for traders. In the medium term, continued governance issues and investor mistrust may deter buying interest. Over the long term, sector consolidation under stronger treasuries and expansion into Web3 could restore stability, but only after further shakeouts and potential price weakness. Traders should therefore brace for continued downward pressure and heightened volatility.