The post Why Crypto-Treasury Stocks Fall Faster Than the Assets They Hold appeared on BitcoinEthereumNews.com.

Is the “crypto treasury” strategy a double-edged sword for investors? Not long ago, companies marketed crypto-treasury stocks as a straightforward investment. They purchased shares to gain exposure to Bitcoin (BTC) or other digital assets while benefiting from the liquidity and regulatory oversight of public markets. In rising markets, this approach was effective. Shares of companies with substantial crypto holdings frequently outperformed the underlying assets, attracting investors who wanted crypto exposure without directly owning tokens. However, during market declines, this relationship breaks down sharply. Crypto-treasury stocks tend to experience more abrupt downturns than the cryptocurrencies they hold. For example, during recent market pullbacks since October 2025, Bitcoin fell around 30%, while shares of Strategy dropped by roughly 57% over the same period. This pattern is not random. It stems from the interaction between equity markets, corporate balance sheets and investor behavior. In theory, if a company holds a large amount of crypto, its market value should track the asset’s price. In practice, history tells a different story. During sell-offs, these equities tend to underperform the assets they are meant to represent. The reason crypto-treasury stocks behave this way is that buying these shares is not the same as buying Bitcoin. Investors are purchasing equity in a leveraged, sentiment-sensitive company that owns Bitcoin. This distinction becomes critical when market risk appetite fades. Did you know? In bull markets, crypto-treasury stocks often trade at a premium to the value of the crypto they hold, meaning investors willingly pay extra for future accumulation or expectations of financial engineering. What are investors really acquiring when investing in crypto? Crypto-treasury companies are operating businesses, not exchange-traded funds (ETFs) or trusts. Even if their primary activity is holding crypto, their shares represent ownership in a corporation and are subject to: A capital structure that includes equity, debt…

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Filed under: News - @ January 7, 2026 4:28 am