TL;DR – Crypto-treasury companies that raised funds to buy Bitcoin and Ether are experiencing significant losses as the crypto market sells off, with some stocks down 20-50% despite still trading at premiums to their underlying holdings. The model faces scrutiny as direct crypto ETFs make these leveraged vehicles less necessary for institutional access.
The Bitcoin Treasury Trade Under Pressure
The Wall Street Journal article "The Year's Hottest Crypto Trade Is Crumbling," published on November 9, 2025, by Gregory Zuckerman and Vicky Ge Huang, examines the recent downturn in crypto-treasury companies. These entities raise funds through stock sales or debt to acquire cryptocurrencies such as Bitcoin and Ether, effectively serving as leveraged vehicles for crypto exposure. The article highlights how a broader crypto market selloff has led to significant declines in their share prices.
MicroStrategy's Strategy Leads the Decline
Michael Saylor's company, formerly MicroStrategy and now known as Strategy (MSTR), originated this approach in 2020 by converting a software firm into a major Bitcoin holder. Its market capitalization reached $128 billion in July 2025 but has since fallen to approximately $70 billion, with shares declining 26% over the past month.
This mirrors a 15% drop in Bitcoin prices, influenced by factors including:
- President Trump's October 10 tariff announcement on China
- A prolonged government shutdown
- Uncertainty in Federal Reserve monetary policy
Saylor has publicly stated on social media that Bitcoin is currently "on sale," while critics anticipate further premium compression in these stocks.
Broader Market Impact Across Treasury Companies
Similar declines affect other companies across the sector:
- BitMine Immersion Technologies (BMNR), supported by Peter Thiel and managed by Tom Lee, has decreased more than 30% in the past month
- ETHZilla (ETHZ), which shifted from biotechnology to an Ether treasury and also receives Thiel's backing, is down 23%
- Strive (ASST), a Bitcoin-focused treasury, has fallen 28%, though its CEO, Matt Cole, notes the use of preferred shares for fundraising provides some stability despite purchasing Bitcoin at prices over 10% above current levels
- Leveraged products, such as Matthew Tuttle's MSTU ETF, which targets twice the return of Strategy, have dropped 50%
Contrasting Investor Perspectives
The article presents divergent views from market participants:
Bears on the Model: Jim Chanos, known for short-selling, had positioned against Strategy while holding Bitcoin directly, citing overvaluation. He recently unwound this trade as premiums have moderated. Brent Donnelly of Spectra Markets questions the model, comparing it to "paying $2 for a one-dollar bill," given the availability of direct crypto access via ETFs.
Retail Investors Staying the Course: Cole Grinde from Seattle reports losses on BitMine holdings but continues to invest, citing Ethereum's blockchain development and Lee's expertise.
The Future of Crypto Treasuries
Overall, the piece suggests that while some companies hold cash reserves to purchase assets during dips, ongoing losses may complicate further capital raising, potentially impacting crypto prices. The viability of crypto-treasuries is under scrutiny, as their initial role in providing institutional access has diminished with ETF proliferation.
Tuttle observes that these firms act as amplified crypto investments, magnifying both gains and losses.
Additional Resources
For reviews and comparisons of Bitcoin treasury companies, including favorites and industry leaders tracking over 157 public firms' holdings, stock performance, and strategies, visit Bitcoin Treasury Companies.
Additional resources include articles on:
- Public companies' Bitcoin treasury holdings as a hedge against inflation
- Smarter Web Company's Bitcoin treasury build-up
- Robinhood's Bitcoin treasury tease
Related videos and podcasts feature:
- "Should You Be Trading Bitcoin Treasury Companies?" at https://21rates.com/podcast/should-you-be-trading-bitcoin-treasury-companies
- "1 Year In with Capital B - Treasury Talks" at https://21rates.com/podcast/1-year-in-with-capital-b-alexandrelaizet-live-on-treasury-talks
- "Bitcoin Exposure is Not Bitcoin Ownership" at https://21rates.com/podcast/bitcoin-exposure-is-not-bitcoin-ownership
External Links for Further Reading
- Original WSJ Article: The Year's Hottest Crypto Trade Is Crumbling
- Related WSJ Coverage: Trump Family Amasses $5 Billion Fortune After Crypto Launch
- Related WSJ Coverage: This Buffett Devotee Is Plowing Billions Into Crypto
- Related WSJ Coverage: The Trumps' New Crypto Money Maker: Deals With Themselves
- Related WSJ Coverage: Crypto Entrepreneur Do Kwon Pleads Guilty to Fraud Charges
- MicroStrategy Investor Relations: https://www.microstrategy.com/en/investor-relations
