Companies Liquidate Crypto holdings to Bolster Stumbling Stock Prices
NEW YORK – A wave of corporate crypto sell-offs is underway as companies scramble to shore up their share prices, reversing a recent trend of holding digital assets on balance sheets. The move comes amid broader cryptocurrency market volatility and increasing pressure on firms that invested heavily in crypto during the bull run.
Several companies that adopted a “crypto treasury” model – holding bitcoin and other digital assets – are now liquidating those holdings to fund share buybacks and manage debt. This shift signals growing financial strain and a reassessment of the risks associated with tying corporate fortunes to the volatile crypto market.
FG Nexus, an ether holder based in North Carolina, recently sold approximately $41.5 million of its tokens to finance a share buyback program. The company’s market capitalization stands at $104 million, while its remaining crypto holdings are valued at $116 million. Similarly, ETHZilla, a Florida-based life sciences company, offloaded around $40 million worth of ether to fund its own buyback initiative.
The pressure isn’t limited to ether holders. Sequans Communications, a French semiconductor company, sold roughly $100 million of its bitcoin this month to service its debt obligations, highlighting the challenges faced by companies that borrowed to invest in crypto.Sequans’ market capitalization is $87 million, while its bitcoin holdings are currently worth $198 million.
“It was inevitable,” said Jake ostrovskis, head of OTC trading at Wintermute.”It got to the point where there’s too many of them.”
Georges Karam, chief executive of Sequans, described the sale as a “tactical decision aimed at unlocking shareholder value given current market conditions.”
Experts warn that companies holding less liquid or more obscure tokens may face greater difficulties in finding buyers. “When you’ve got a medical device company buying some long-tail asset in crypto,a niche in a niche market,it is not going to end well,” cautioned Morgan McCarthy,adding that he believes 95 percent of digital asset treasuries “will go to zero.”
Despite the broader sell-off, MicroStrategy continues to double down on its bitcoin holdings, purchasing more of the token even as its price has fallen to $87,000 from $115,000 a month ago. However, the firm faces potential removal from major equity indices, a development that could further exacerbate selling pressure on its stock.
MicroStrategy’s executive chairman, Michael Saylor, remains unfazed by market fluctuations. “Volatility is Satoshi’s gift to the faithful,” he said this week, referencing the pseudonymous creator of bitcoin.
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