U.S. and Canadian digital asset treasury firms have taken a brutal hit in 2025. Companies that turned their balance sheets into crypto investment vehicles have seen their median stock prices tumble by about 43%, according to data reported by Bloomberg. What was once marketed as a bold financial innovation is now exposing serious vulnerabilities in the “Bitcoin-as-treasury” model.
These firms, often called digital asset treasuries (DATs), follow a strategy made famous by Michael Saylor. He transformed his company, Strategy Inc., into a de facto Bitcoin holding vehicle, using corporate cash – and later, borrowed funds – to buy and hold large quantities of cryptocurrency. Inspired by that move, more than 100 companies in the U.S. and Canada embraced a similar approach, betting that digital assets would act as a superior store of value and a magnet for investors.
For a while, the bet seemed to work. In the early phase of the trend, share prices of many DATs rose faster than the value of the crypto they held. Investors were not just paying for the underlying tokens; they were paying a premium for exposure, narrative, and perceived upside. High-profile names, including investor Peter Thiel and members of the Trump family, were associated with or invested in firms using this balance sheet strategy, adding a layer of hype and legitimacy in the eyes of some market participants.
That euphoria has sharply reversed in 2025. As cryptocurrency prices cooled off and volatility returned with force, the stock performance of DATs started mirroring – and in many cases underperforming – the asset class they were meant to leverage. Bloomberg data shows that median stock returns for these companies have slumped in parallel with their token portfolios this year, leaving shareholders exposed to concentrated, poorly diversified risk.
Some case studies illustrate the arc from enthusiasm to disappointment. SharpLink Gaming, for instance, saw its stock jump after announcing a pivot toward buying digital tokens. The market initially rewarded the move, anticipating that crypto exposure would unlock fresh growth and speculative interest. However, subsequent trading data shows that SharpLink’s shares have fallen significantly from their highs as sentiment around the strategy soured.
Greenlane Holdings followed a similar path. Despite holding cryptocurrency tokens on its balance sheet, the company’s valuation declined, suggesting that simply owning digital assets is no longer enough to convince investors that a firm is on a sustainable growth trajectory. Many of these digital asset treasuries are now projected to end 2025 with stock prices below where they started the year, even when broader equity indices have been more resilient.
A critical flaw in the model has been the heavy use of leverage. Several corporations borrowed aggressively to fund their crypto purchases, raising substantial capital in 2025 specifically to acquire tokens. While the underlying holdings typically do not generate cash flow – unlike productive assets such as factories, software, or intellectual property – the debt used to buy them still carries interest obligations. In some cases, these companies also pay dividends, compounding the cash drain. When token prices fall or trade sideways, the math quickly becomes punishing: rising debt costs, stagnant or shrinking asset values, and limited operating income to bridge the gap.
Strategy Inc., the poster child of this treasury strategy, is itself under pressure. Its shares have dropped from a July peak and, according to Bloomberg’s analysis, are likely to fall further by year-end. Chief Executive Officer Phong Le has hinted the company could be forced to sell part of its holdings to fund dividends if its market capitalization dips below the value of its assets. That stance marks a notable departure from Michael Saylor’s earlier, more absolutist position that the firm would never sell its core digital asset reserves. The shift underlines how theoretical “diamond hands” meet the hard reality of public-market accountability and shareholder expectations.
Smaller DATs have it even tougher. Many of them lack the name recognition, balance sheet strength, or institutional investor base that larger players enjoy. As a result, they are finding it increasingly difficult to raise new capital. For companies whose entire business model hinges on expanding or at least maintaining their token holdings, restricted access to financing is a serious existential threat.
The pain is especially severe among firms that ventured beyond blue-chip cryptocurrencies into more obscure, highly volatile tokens. These bets were designed to amplify potential upside, but in a more cautious 2025 market, they have instead amplified losses. Alt5 Sigma Corp., which reportedly bought a large position in a particularly volatile token and is backed by two of Donald Trump’s sons, has seen its share price slide from its June high. For investors, the combination of speculative assets, thin liquidity, and limited transparency around token portfolios is translating into elevated risk with little obvious compensation.
Under the surface, the 2025 drawdown is exposing structural weaknesses in the digital asset treasury concept:
– Most of the crypto holdings do not yield steady cash flows. They may appreciate in price, but they do not pay interest or dividends by default.
– Corporate expenses, interest on debt, and shareholder payouts continue regardless of token price action.
– When share prices detach from the net asset value of the crypto holdings, the equity can suddenly swing from “leveraged upside play” to “overvalued liability.”
This dynamic leaves management with few good options during downturns. Selling tokens to cover obligations can lock in losses and contradict the long-term holding narrative. Issuing new shares at depressed prices dilutes existing investors and signals distress. Taking on more debt to double down on the strategy can be perceived as reckless, especially if lenders tighten standards.
Yet, the story is not purely one of failure. The rise and current struggles of DATs have clarified several lessons for corporate finance and investors engaging with digital assets:
1. Treasury strategy is not the same as speculation. Using a portion of corporate cash to diversify into digital assets is fundamentally different from turning a listed operating company into a leveraged crypto fund. Many DATs blurred this line.
2. Balance sheet resilience still matters. When the macro environment shifts and interest rates stay elevated, companies heavily reliant on non-productive assets and debt face outsized pressure. Investors have become more sensitive to this trade-off in 2025.
3. Token selection and risk management are critical. Firms that concentrated in illiquid or hype-driven tokens are suffering disproportionately. The idea that any token exposure automatically adds cutting-edge value has clearly broken down.
4. Market narratives are cyclical. In the boom phase, the “Bitcoin on the balance sheet” storyline commanded premiums and media attention. In a more sober climate, the same narrative can read as undisciplined capital allocation.
Looking ahead, digital asset treasuries are likely to evolve rather than disappear. Boards and executives are already reassessing how they integrate crypto into corporate strategies. Some possible directions include:
– Capping exposure to digital assets at a modest percentage of total assets, rather than letting it dominate the balance sheet.
– Prioritizing more established tokens and on-chain instruments that generate yield or support real business activities.
– Pairing token holdings with clear risk frameworks, stress tests, and disclosure policies to restore investor confidence.
– Refocusing on core operations, using any digital asset upside as supplementary rather than central to the investment case.
For investors, the 43% median stock decline across U.S. and Canadian DATs in 2025 is a sharp reminder that “innovation” does not erase fundamental financial principles. Equity in these firms behaves like a leveraged bet on an already volatile asset class, with an extra layer of corporate risk and governance complexity. Understanding that stack of exposures – rather than simply chasing the next treasury-to-crypto pivot – is becoming essential.
At the same time, the upheaval in DAT stocks is helping the broader market distinguish between companies using digital assets as a tool and those using them as a storyline. As 2025 progresses, that distinction is shaping valuations, access to capital, and the playbook for any corporation considering a similar move. In the end, the experiment in corporate crypto treasuries may still yield durable models, but it is doing so through a painful and very public process of trial, error, and repricing.