The post The Structural Risks Behind Digital Asset Treasury Companies  appeared on BitcoinEthereumNews.com.

In our previous article on the rise of Digital Asset Treasuries, we highlighted how these public companies are using public equities and debt instruments to buy more crypto assets. As crypto prices go up, the value of their holding in turn increases which then often leads to strengthening their stock and they are ultimately able to raise fresh capital to buy more crypto. The result is a self-reinforcing loop or flywheel that can speed up growth when conditions are favourable.  That said, financial reflexivity does not only work on the way up. Ever since the October 10th leverage unwind, the crypto market has structurally tilted to the downside with total market cap falling by over 50%. Assets like Bitcoin and Ethereum, which makes up the bulk of digital asset treasuries, are now down over 25% and 38% respectively. This downturn has thereby prompted serious questions around the sustainability of this model.  The reality is that when crypto prices fall, equity valuations can compress, premiums can vanish and access to cheap capital can tighten. The volatility around the stock prices of the two largest DATs, Strategy and BitMine, is indicative of how closely these equities can track shifts in crypto sentiment.  This article looks into the risks associated with the DAT model, not from the standpoint of whether crypto itself will succeed, but from the perspective of capital structure and balance sheet stability.  Reflexivity Cuts Both Ways  In a rising market, higher crypto prices lift the value of treasury holdings, which can push the stock price higher and make raising capital easier. This is the part of the cycle that many have gotten accustomed to since the DAT trend really took off last year. What is not discussed enough however is how the same loop works in reverse.  When crypto prices…

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Filed under: News - @ February 24, 2026 10:30 am