When hundreds of Digital Asset Treasuries were launched over the past year, they had one goal: to outperform the price of the cryptocurrencies they hold. A goal that’s (very) difficult to meet now that the market is plummeting, to the point of exposing market leaders Strategy and BitMine to significant unrealized losses.
Bitcoin Falls Below Strategy’s Average Purchase Price
The year 2025 will very clearly have been the year of institutional adoption of cryptocurrencies, symbolized by the unprecedented surge in publicly traded companies eager to add them to their treasuries in order to attain the highly coveted status of a Digital Asset Treasury (DAT).
This business model has been in use since 2020 by the sector’s undisputed leader, Strategy, which now holds a portfolio of 712,647 BTC—approximately $54 billion—equivalent to just over 3.5% of the currently available supply.
As a result, Michael Saylor’s company has established itself as the world’s largest holder of Bitcoin. This appears to be a solid position, but it faces one significant challenge: its average purchase price, set at exactly $76,037, has just surpassed the current price of BTC, which has now fallen below the $76,000 mark.
This is enough to further destabilize a company whose stock is already trading at a discount of more than 65% from its all-time high last July and nearly 60% over the past year—especially given the $8.2 billion in convertible debt on its balance sheet.
However, unlike many of its peers, Strategy is not a DEX that emerged from the latest cryptocurrency bull run. This position allows it to maintain an estimated $2.2 billion in dollar liquidity reserves, sufficient to cover its obligations for an estimated period of nearly three years.
In this context, the decline in Bitcoin’s price essentially means that Strategy will have to slow down its aggressive buying. However, the BTC price must not continue to fall—or remain below its average purchase cost for too long—or the company’s stock could plummet even further.
BitMine Reports $7 Billion in Unrealized Losses
The situation is just as complicated for the leader in Ethereum Treasuries, BitMine, largely exacerbated by the aggressive strategy of its CEO, Tom Lee, who had just made a massive purchase of 40,000 Ethers last week, right before the price of ETH plummeted by more than 20%.
As a result, the company now reports unrealized losses of nearly $7 billion, with the value of its Ether reserves—approximately 4.24 million units—having fallen from nearly $14 billion last October to about $9 billion at the time of this writing.
BitMine’s stock has fallen nearly 10% over the past 5 days. And it’s safe to say that Tom Lee’s promise to generate $164 million in annual revenue from staking his ETH seems like a drop in the bucket when it comes to turning around what was supposed to become one of the most profitable companies in the United States.
