**Crypto Treasury Companies Pause Buying Amid Market Downturn**
Crypto treasury companies are taking a cautious step back following the recent market downturn earlier this month. Firms holding significant amounts of Bitcoin and Ethereum on their balance sheets have nearly stopped purchasing since prices tumbled on October 10. This slowdown reflects an ongoing sense of uncertainty and caution across the sector.
David Duong, Head of Institutional Research at Coinbase, noted that Bitcoin buying activity among treasury companies dropped to the lowest level seen this year and has yet to rebound.
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### Bitcoin Buying Halts as Confidence Weakens
The pause in Bitcoin purchases by crypto treasury companies signals that large firms are uncertain about the market’s direction. Typically, these organizations act as strong buyers during price dips, helping to stabilize volatility. However, their recent silence indicates limited faith in any near-term recovery.
Duong described these companies as “heavy hitters with deep pockets,” explaining that their lack of activity highlights a cautious approach—even at current support levels. As a result, many of these firms have chosen to preserve their cash reserves.
There is one notable exception: BitMine Immersion Technologies. This Ethereum-focused company has continued an aggressive buying spree. Since October 10, BitMine has reportedly spent over $1.9 billion to acquire nearly 483,000 ETH.
Ethereum followed Bitcoin’s drop earlier in October, falling more than 15% to around $3,686 before climbing back to $4,130. Without BitMine’s steady purchasing, Ethereum demand among treasury companies would have otherwise turned negative.
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### Market Fragility Amid Fading Institutional Support
Duong warned that if BitMine slows its activity, overall corporate buying could collapse. He noted that the market appears fragile when the largest discretionary balance sheets are inactive.
The absence of these major buyers means less market stability and higher risks during sharp price swings. Previously, large companies like MicroStrategy and Metaplanet boosted sentiment through regular Bitcoin purchases. Now, with many pausing or even selling, investors fear further downside pressure.
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### Crypto Treasury Companies Face Valuation Pressures
Beyond fluctuations in market prices, several crypto treasury companies are facing shrinking valuations, with some trading below their net asset value (NAV). This condition means their market capitalizations have fallen below the worth of their crypto holdings.
Japanese firm Metaplanet is a prominent example. Despite reporting more than 115% growth in Bitcoin-related revenue in Q3, its modified NAV recently slipped to 0.99 before recovering slightly. The company’s shares have plunged around 70% since June, erasing the premium once associated with its Bitcoin-centric strategy.
When a company’s NAV falls below one, it suggests investors no longer value the business above its underlying assets. This drop reflects waning confidence that holding crypto on corporate balance sheets automatically adds value.
According to Fidelity Digital Assets, non-mining public companies now hold over 700,000 BTC and 3 million ETH combined.
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### ETHZilla’s Sale Signals Shifting Priorities
ETHZilla, another major Ethereum treasury firm, recently sold $40 million worth of ETH to fund stock buybacks after its shares traded at a 30% NAV discount. While this move might help reduce discount pressure, it also demonstrates how some firms are compelled to balance supporting their stock price with maintaining crypto reserves.
Charles Edwards of Capriole Investments outlined three potential paths for crypto treasury companies trading below NAV — all of which pose challenges.
1. **Sell Holdings:** This generates cash but risks pushing down asset prices, harming both business prospects and the broader market.
2. **Seek Acquisition:** Merging with larger firms or funds could provide relief but would lead to increased market consolidation.
3. **Increase Leverage:** Borrowing against crypto assets to boost returns may attract investors but exposes companies to significant risk if markets decline again.
Edwards cautioned that growing leverage within the sector could set the stage for another crisis should asset prices weaken further.
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As the crypto market navigates this fragile period, the actions of treasury companies will remain a critical factor influencing overall sentiment and stability. Investors and industry watchers will be closely monitoring whether confidence returns or the cautious stance persists.
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