“It was inevitable,” said Jake Ostrovskis, head of OTC trading at Wintermute, referring to the sell-off in digital asset treasury stocks. “It got to the purpose where there’s too a lot of them.”
Several corporations have begun selling their crypto stockpiles in an effort to fund share buybacks and shore up their stock prices, in effect putting the crypto treasury model into reverse.
North Carolina-based ether holder FG Nexus sold about $41.5 million of its tokens recently to fund its share buyback program. Its market cap is $104 million, while the crypto it holds is price $116 million. Florida-based life sciences company turned ether buyer ETHZilla recently sold about $40 million price of its tokens, also to fund its share buyback program.
Sequans Communications, a French semiconductor company, sold about $100 million of its bitcoin this month to be able to service its debt, in an indication of how some corporations that borrowed to fund crypto purchases are actually struggling. Sequans’ market capitalization is $87 million, while the bitcoin it holds is price $198 million.
Georges Karam, chief executive of Sequans, said the sale was a “tactical decision aimed toward unlocking shareholder value given current market conditions.”
While bitcoin and ether sellers can find buyers, corporations with more area of interest tokens will find it harder to boost money from their holdings, based on Morgan McCarthy. “While you’ve got a medical device company buying some long-tail asset in crypto, a distinct segment in a distinct segment market, it shouldn’t be going to finish well,” he said, adding that 95 percent of digital asset treasuries “will go to zero.”
Strategy, meanwhile, has doubled down and purchased much more bitcoin as the worth of the token has fallen to $87,000, from $115,000 a month ago. The firm also faces the looming possibility of being cut from some major equity indices, which could heap much more selling pressure on the stock.
But Saylor has brushed off any concerns. “Volatility is Satoshi’s gift to the faithful,” he said this week, referring to the pseudonymous creator of bitcoin.
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