Analyst: Crypto Treasury Co. May See a Sell-off Wave, Enter a Vicious Cycle

On November 26th, according to the Financial Times, with the plummeting of cryptocurrency prices, crypto treasury companies are actively selling the held tokens to prop up their declining stock prices. As a result, the "digital asset treasury" trend is rapidly disintegrating. Strategy, led by Michael Saylor, is the largest corporate Bitcoin holder in the world. Its stock price has dropped by 50% in the past three months, which has led to a simultaneous decline in the stock prices of many crypto treasury companies. As Saylor's company's market value is now lower than the value of the held Bitcoin, investors are worried that this business model, which relies on the appreciation of cryptocurrency prices and a large amount of equity and debt issuance to form a virtuous cycle, is facing a collapse. Adam Morgan McCarthy, the senior research analyst at the crypto data company Kaiko, said: "These companies will experience a wave of sell-offs, and the situation will only get worse. This is a vicious cycle where once the price starts to drop, it becomes a cycle of competing price pressure."