Key Points
- The bitcoin and overall crypto market downtrend has negatively affected digital asset treasury companies that are hoarding leading crypto assets on their balance sheets for shareholder value.
- Strategy, Evernorth, and Bitmine have suffered combined unrealized losses of $2.31 billion from their investments in Bitcoin (BTC), XRP, and Ethereum (ETH) this year. The broader market decline has also impacted their stock prices.
- Santiment analysts have noted a divergence between whale selling and retail buying of bitcoin, which they warn is not a good sign for the market’s recovery. Meanwhile, other analysts are optimistic that the BTC price will hit new ATHs by the year-end once macro conditions improve.
The ongoing crypto market decline is piling pressure on the price of bitcoin and leading altcoins. Top names in the digital asset treasury (DAT) market, such as Strategy, Evernorth, and Bitmine, have suffered notable unrealized losses from their investments in Bitcoin (BTC), XRP, and Ethereum (ETH).
According to data procured by crypto analytics firm CryptoQuant, the market’s downturn has significantly impacted large Bitcoin and altcoin positions, highlighting the volatility and massive risk exposure for large-scale investors.
Crypto Market Crash Hits Strategy, Bitmine, and Evernorth with $2.3B in Unrealized Losses
Following the broader market wipeout on October 10, which saw bitcoin drop below $100,000 for the first time this year. This resulted in the stock price of these firms dropping to historic lows.
Bitcoin holdings experienced significant price pressures across prominent DATs. The price of MSTR has declined by over 50%, with the common stock of Strategy (formerly MicroStrategy) now trading at $241, closer to its lower price band. This is directly correlated to the Michael Saylor-founded firm’s bitcoin stockpile, suggesting the impact of the ongoing bearish market trend.
Up to $30.8 billion worth of BTC in Strategy’s coffers, bought at an average price of $106,000 per coin, has suffered unrealized losses of $120 million. This has negatively affected MSTR, which is now trading 80% below its all-time high. It also underscores how continued crypto market volatility is influencing the profitability of digital asset treasury companies.
According to data from BitcoinTreasuries.net, as of November 3, Strategy holds 641,205 BTC on its balance sheet, valued at approximately $65.57 billion, making it the single-largest holder of the “digital gold”. The company’s holdings represent about 3.05% of the total bitcoin supply of 21 million coins.
Meanwhile, XRP treasury firm Evernorth, which purchased 388.7 million XRP (approximately $1 billion) in a bid to become the largest corporate holder of the fourth-most valuable cryptocurrency, has suffered $97 million in unrealized losses. Moreover, crypto mining firm Bitmine, which added 442,000 ETH ($1.52 billion) to its balance sheet in early October, is sitting on an unrealized loss of approximately $2.1 billion.
Market observers are closely monitoring whether these crypto treasury companies can withstand a continuous bearish market.
Santiment Analysts Notice Divergence in Whale Selling and Retail Buying of Bitcoin, Calling It a Worrying Trend
On the other hand, retail investors are snapping up bitcoins from bearish whales, which, according to Santiment, is a troubling pattern for its price. In a market report released last week, the firm’s analysts said that historically, prices tend to follow the direction of whale movements, and not retail.
Since October 12, bitcoin whales – wallets holding between 10 and 10,000 BTC – have sold approximately 32,500 BTC ($3.32 billion). However, Santiment added that small retail wallets have been “aggressively buying the dip.”
Between then and November 4, bitcoin’s price fell from $115,000 to $98,000, representing a 15% decline. The asset has since reversed much of its losses to recover to the $103,000 range.
Santiment noted that a “major divergence” has appeared between large and small bitcoin investors, but described the pattern of whales selling and retail buying as a “cautionary signal.”
Market Observers Optimistic that Bitcoin Can Record New ATHs by Year-End if Macro Conditions Improve
However, not all market analysts share the same view. Bitfinex researchers told crypto media outlet Cointelegraph that rather than a “clear sprint” to new highs, they expect bitcoin to experience near-term consolidation and some volatility. According to their analysis, ETF inflows in early October pushed the price to around $125,000, before mid-month macro shock, a major options expiry, and profit-taking knocked the price back down to the $100,000 range.
On Friday, spot Bitcoin ETFs broke out of a six-day outflow streak, which resulted in $2.04 billion exiting the market. Bitfinex believes that if the weekly inflow volume returns to above $1 billion and macro conditions improve, bitcoin may have a chance to climb toward $130,000.
Meanwhile, Nansen senior research analyst Jake Kennis noted that although BTC has historically posted year-over-year gains, the recent liquidation trend and breakdown in market structure have made it “far less probable” at this stage. However, he said that there is still room for “meaningful upside” going into the year-end, with a decisive shift in market momentum that could trigger moves to a new all-time high for bitcoin.
At the time of writing, Bitcoin (BTC) is trading at $$101,883.93 – up 1.97% in 24 hours.