The recent downturn in Bitcoin (BTC) has sent shockwaves through the corporate world, heavily impacting publicly traded companies that strategically built their balance sheets around the leading cryptocurrency. As Bitcoin's price struggled, hovering near the $65,000 mark and extending a sharp decline initiated last October, a significant ripple effect has been observed across equity markets, causing substantial drops in the shares of crypto-exposed firms.
Bitcoin's Slide Pressures Digital Asset Treasury Firms
According to a Reuters report, the renewed volatility in digital assets is directly contributing to a decline in stock prices for companies holding Bitcoin and other tokens. This trend raises concerns about potential broader stress spreading across the sector. Last year, there was a notable surge in publicly traded firms investing in cryptocurrencies, with many executives betting on the long-term appreciation of digital assets. However, the current market dynamics, combined with investor anxiety over stretched valuations in artificial intelligence (AI) stocks and uncertainty surrounding future Federal Reserve interest rate cuts, have broadly weighed on risk assets, including cryptocurrencies. Consequently, Bitcoin has dipped to its lowest levels since October 2024, placing considerable pressure on companies whose business models rely heavily on holding digital assets. Many such digital asset treasury firms experienced sharp drops in their share prices on Thursday, reflecting the market's nervous reaction to the cryptocurrency's performance.
Major Companies Count Their Losses
Among the hardest hit is Strategy (formerly MicroStrategy), which stands as the largest corporate BTC holder with over 700,000 coins. Its shares have plummeted from approximately $457 in July to as low as $106 on Thursday. In a significant revision in December, the company slashed its 2025 earnings outlook, citing weakness in Bitcoin prices, and announced plans to establish a reserve to support dividend payments. This downgrade drastically altered its full-year results forecast from an earlier projection of a $24 billion net profit to a range spanning a $6.3 billion profit to a $5.5 billion loss. Other Bitcoin-focused firms have also felt the squeeze. Shares of the U.S.-based Smarter Web Company fell nearly 18% on Thursday, while rival Bitcoin buyers Nakamoto Inc. and Japan's Metaplanet saw declines of almost 9% and over 7%, respectively. Beyond BTC-specific holdings, other crypto-related entities suffered as well: Alt5 Sigma, known for accumulating the Trump family's World Liberty Financial (WLFI) token, dropped 8.4%; SharpLink Gaming, a holder of Ethereum (ETH), declined about 8%; and Forward Industries, which holds Solana (SOL), slid nearly 6%. This broad-based sell-off underscores the interconnectedness of the crypto market and its wider financial ecosystem.
