Crypto Crash Slashes BTC ETH XRP Treasury Valuations Will Wall Street Sell?

TLDR

• Bitcoin, Ethereum, and and XRP treasuries face billions in losses after October’s market crash.
• Firms holding BTC, ETH, and XRP report massive unrealized losses and market struggles.
• Experts warn that overleveraged crypto treasuries may impact market stability long-term.
• Wall Street’s next move could determine whether BTC, ETH, and XRP recover or decline further.

The recent crypto market downturn has caused major losses for companies holding Bitcoin (BTC), Ethereum (ETH), and XRP in their treasuries. As prices plummeted through October, many firms saw their valuations drop significantly. With concerns about the sustainability of their strategies, the question arises: will Wall Street choose to hold or sell these struggling digital assets?

Losses Across Major Digital Asset Treasuries

In October, the value of crypto holdings fell sharply, affecting companies that had heavily invested in Bitcoin, Ethereum, and XRP. Companies that relied on these assets as part of their treasury strategy now face deep unrealized losses. For example, the investment firm Evernorth, which invested nearly $947 million in XRP, has reported a loss of about $78 million, bringing the value of its XRP holdings down to $868 million.

Bitcoin and Ethereum treasury strategies have not fared better. One company, Strategy, has seen its stock price fall more than 50%, bringing it to the low end of its valuation range relative to Bitcoin. Another firm, Metaplanet from Japan, has lost approximately $120 million on its crypto investments. Additionally, its stock price has dropped nearly 80% from its peak, highlighting the scale of the market downturn.

Crypto Treasury Firms and Overleveraging Concerns

Many experts are raising concerns that some crypto treasury firms (DATs) may have overleveraged themselves. Omid Malekan, a blockchain expert, pointed out that many of these firms set up digital asset treasuries with unrealistic expectations. He suggested that the primary focus of some companies was to “get rich quick” rather than long-term financial stability.

Malekan also noted that several founders and venture capitalists placed themselves on the boards of these firms, creating conflicts of interest. This situation, he claimed, encouraged the rapid selling of assets, which in turn put additional selling pressure on the market. “By releasing their unlocked tokens into the market, they accelerated price declines and shattered investor trust,” Malekan said. This behavior contributed to the market’s overall instability during the recent downturn.

Will Wall Street Hold or Sell These Digital Assets?

As the crypto market recovers from its October losses, the big question facing institutional investors is whether to hold or sell these assets. Some analysts warn that the assets might have lost much of their value for the time being, while others suggest that Wall Street might choose to hold on in anticipation of a potential rebound.

BitMine, another firm with substantial exposure to Ethereum, added 442,000 ETH to its reserves following the market crash. However, despite this additional investment, the firm has reported an estimated $2.1 billion in paper losses. These situations are making it difficult for investors to predict whether the assets will recover or continue to decline in value. The decision of whether to hold or sell is now a critical one for many firms exposed to these digital assets.

The Crypto ETF Standard and Future Prospects

The potential introduction of a crypto exchange-traded fund (ETF) has sparked further debate on how it could impact the future of digital asset treasuries. Experts like Nate Geraci, an ETF analyst, have suggested that the new ETF standard could play a role in the valuations of firms holding large crypto reserves. As these companies face ongoing pressure from market fluctuations, the success or failure of the ETF could be a crucial factor in determining their future strategy.

As the market continues to adjust, these firms will likely have to decide whether to hold on to their crypto assets or divest them to minimize losses. With the crypto space evolving rapidly, Wall Street’s response could shape the trajectory of these companies in the coming months.

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