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NAV Crash Triggers Massive Crypto Liquidations
Companies holding crypto assets are under intense pressure as share prices fall below Net Asset Value (NAV). FG Nexus disclosed selling 10,922 ETH to finance share buybacks. In a sector managing $42.7 billion in cryptocurrency assets, this wave of forced selling exposes critical vulnerabilities in the corporate treasury model.
Stock Collapse Forces ETH Liquidation
FG Nexus sold ETH in October to support a $200 million share repurchase program. The company’s stock price had fallen significantly below the value of its underlying crypto holdings. With 40,005 ETH and $37 million in cash remaining, total debt climbed to $11.9 million.
Management repurchased 3.4 million shares at approximately $3.45 each, representing 8% of outstanding shares. While NAV reached $3.94 per share by mid-November, the stock traded below this level. The strategy required $10 million in new debt and liquidated 21% of ETH reserves compared to September levels.
FG Nexus isn’t alone. ETHZilla sold roughly $40 million worth of ETH in late October for share buybacks. The company spent nearly $12 million on 600,000 shares since October 24, attempting to close a persistent 30% NAV discount.
What Happens When mNAV Falls Below 1.0?
When a digital asset treasury (DAT) company’s shares trade below its crypto holdings value, shareholders demand action. An mNAV ratio below 1.0 puts management under pressure to unlock this hidden value. Share buybacks offer the most effective solution, but they require cash. Without sufficient reserves, companies must sell crypto assets to fund repurchases.
Metaplanet, a Bitcoin-accumulating DAT company, saw its mNAV drop to 0.99 before recovering to 1.03. Its shares lost 70% from June peaks, signaling sector-wide distress. The use of perpetual preferred equity, which combines fixed dividends with crypto exposure, further complicates capital structures already strained by current market conditions.
$42.7 Billion Accumulation Creates Crisis Potential
DAT companies deployed $42.7 billion in crypto during 2025. A staggering $22.6 billion was accumulated in Q3 alone. This accelerated as Bitcoin surged past $126,000 in October. However, subsequent declines exposed weaknesses in structures built on leverage and capital market access.
Treasury companies represent only 0.83% of total crypto market capitalization. Yet their concentrated holdings amplify their impact during downturns. Leverage through convertible notes, private investment deals, and preferred equity increases selling pressure when prices fall.
Market liquidity deteriorated sharply. Bitcoin’s order book depth at the 1% band dropped from $20 million to $14 million—a 33% decrease that heightens price sensitivity to any selling. Analysts estimate forced sales could reach $4-6 billion if 10-15% of positions are liquidated.
Buying Stopped, Selling Started: Is a System Crisis Coming?
Corporate crypto buying has virtually halted. Declining confidence and slower capital deployment are key factors. Companies that once provided steady demand are now sellers. MicroStrategy’s stock plunged 60% amid Bitcoin volatility, demonstrating correlation risk between crypto prices and equity values even for companies with strong balance sheets.
Smaller treasury firms face greater stress, particularly those holding less liquid assets. Some firms exposed to Solana experienced 40% NAV drawdowns as concentrated bets deepened losses. Limited diversification and thin trading volumes in alternative cryptocurrencies add to sector vulnerabilities.
In November, $4 billion in ETF outflows and reduced market-maker activity intensified volatility. These conditions resemble the 2008 mortgage REIT crisis. The digital asset treasury model’s resilience during prolonged downturns is now in question. Whether these companies can maintain holdings without further forced liquidation will determine if the sector survives intact or undergoes fundamental restructuring.
