"Struggle of Trapped Beasts": Crypto Treasury Firms Are Losing Their Bottom-Fishing Ability

During the brief rally that began in April, crypto treasury companies acted as the main driving force for market accumulation, providing a steady stream of “ammunition” to the market. However, when both the crypto market and stock prices suffered sharp declines, these crypto treasury companies seemed to collectively lose their momentum.

When prices reach a temporary bottom, it would logically be the perfect time for these treasury companies to “buy the dip.” In reality, however, buying slowed or even halted. The reason behind this collective standstill is not simply that their “ammunition” was depleted at the highs or due to panic, but rather that their fundraising mechanisms—which heavily rely on premium valuations—suffered a systemic “cash lock” during the downturn, leaving them “with money they can’t use.”

Hundreds of Billions in “Ammunition” Locked Up

To understand why these DAT (Digital Asset Treasury) companies face the dilemma of “having money but unable to use it,” we first need to analyze the sources of ammunition for crypto treasury companies.

Take Strategy, the current leading crypto treasury company, as an example. Its funding has always come from two main channels. One is “convertible notes”—issuing low-interest bonds to borrow money to buy crypto. The other is the ATM (At-The-Market) issuance mechanism: when Strategy’s stock price trades at a premium to the value of its crypto holdings, the company can issue new shares to raise funds to buy more Bitcoin.

Before 2025, Strategy’s main source of funds was convertible notes. As of February 2025, Strategy had raised $8.2 billion via convertible notes to buy more Bitcoin. Starting in 2024, Strategy began large-scale use of At-The-Market (ATM) stock issuance plans. This method is more flexible: when the share price is above the market value of crypto holdings, shares can be sold at market price to acquire more crypto. In Q3 2024, Strategy announced a $21 billion ATM equity issuance plan, and in May 2025, established a second $21 billion ATM plan. As of now, the remaining available quota for these plans is still $30.2 billion.

However, these quotas are not cash, but rather the amount of Class A preferred and common stock available for sale. For Strategy to turn this quota into cash, it must sell these shares on the market. When the share price trades at a premium (for example, the share price is $200, and each share represents $100 worth of Bitcoin), selling shares is equivalent to converting newly issued stock into $200 in cash, which is then used to buy $200 worth of Bitcoin, thus increasing the Bitcoin per share. This was the logic behind Strategy’s previous “infinite ammo flywheel.” However, when Strategy’s share price mNAV (mNAV = market cap / value of crypto holdings) drops below 1, the situation reverses: selling shares now means selling at a discount. Since November, Strategy’s mNAV has remained below 1 for an extended period. That’s why, despite having a large amount of stock available for sale, Strategy could not buy Bitcoin during this period.

Moreover, not only did Strategy fail to raise funds to buy the dip recently, it even chose to raise $1.44 billion by selling shares at a discount to set up a dividend reserve pool, used to support preferred stock dividends and interest payments on existing debt.

As the template for crypto treasuries, Strategy’s mechanism has been adopted by most treasury companies. Thus, when crypto assets fall, the reason these companies fail to buy the dip is not simply lack of willingness, but that stock prices have fallen so much that the “ammunition depot” is locked.

Nominal Firepower Is Sufficient, But Actually “Guns Without Bullets”

So, apart from Strategy, how much purchasing power do other companies have? After all, there are now hundreds of crypto treasury companies in the market.

Looking at the current market, although there are many crypto treasury companies, their potential for future purchases is not large. There are mainly two types: one type consists of companies whose main business is holding crypto assets, and whose crypto holdings mainly come from their own reserves rather than new purchases via debt. Their ability and motivation to raise funds via debt are limited. For example, Cantor Equity Partners (CEP), which ranks third in Bitcoin holdings, has an mNAV of 1.28. Most of its Bitcoin came from its merger with Twenty One Capital, and there have been no new purchases since July.

The other type adopts a Strategy-like approach, but due to recent falls in stock prices, their mNAV values have generally dropped below 1. Their ATM quotas are also locked, and unless their share prices recover above 1, the “flywheel” can’t turn again.

Beyond issuing debt and selling shares, there is a more direct “ammunition depot”: cash reserves. Take BitMine, the largest ETH DAT company, for example. Although its mNAV is also below 1, it has continued its buying program recently. As of December 1, BitMine reported $882 million in unencumbered cash on its books. BitMine Chairman Tom Lee recently stated, “We believe ETH has bottomed, and BitMine has resumed accumulation, buying nearly 100,000 ETH last week—double the amount from the previous two weeks.” BitMine’s ATM quota is also huge: in July 2025, the total quota was raised to $24.5 billion, with about $20 billion still unused.

BitMine Position Changes

Additionally, CleanSpark announced in late November that it would issue $1.15 billion in convertible bonds this year to buy Bitcoin. Japanese-listed company Metaplanet has also been very active recently, raising over $400 million since November via Bitcoin-backed loans or stock issuance to purchase Bitcoin.

In total, the “nominal ammunition” (cash + ATM quota) on the books of these companies amounts to hundreds of billions of dollars, far surpassing the previous bull cycle. However, in terms of “effective firepower,” the actual bullets they can fire have decreased.

From “Leverage Expansion” to “Yield for Survival”

In addition to locked ammunition, these crypto treasury companies are also shifting to new investment approaches. During market uptrends, most companies followed a simple strategy: buy blindly, use rising crypto and stock prices to raise more funds, and keep buying. But as conditions shift, many companies face greater difficulty raising funds, and must also deal with interest on previously issued debt and operational costs.

Therefore, many companies are now turning to “crypto yield”—participating in crypto network staking to earn relatively stable returns, and using these returns to pay interest and operating costs.

For example, BitMine plans to launch MAVAN (Mainland Validator Network) in the US in Q1 2026 to begin ETH staking. This is expected to bring BitMine $340 million in annualized revenue. Similarly, Upexi, Sol Strategies, and other Solana-based treasury companies can achieve around 8% annualized yield.

It’s foreseeable that as long as mNAV remains below 1.0, hoarding cash to meet debt maturities will become the main theme for treasury companies. This trend directly impacts asset choices. Since Bitcoin lacks native yield, pure Bitcoin treasuries have slowed accumulation, while Ethereum, which can generate cash flow through staking to cover interest costs, has maintained more resilient accumulation.

This shift in asset preference is essentially a compromise by treasury companies facing liquidity constraints. When the channel of raising cheap funds through stock price premiums is closed, seeking yield-generating assets becomes the only lifeline for maintaining healthy balance sheets.

Ultimately, “infinite ammo” is just a pro-cyclical illusion built on stock price premiums. When the flywheel locks up due to discounts, the market must face a cold reality: treasury companies have always been trend amplifiers, not contrarian saviors. Only when the market recovers first will the flow of funds open up again.