Important points
- The downward trend in Bitcoin and the overall crypto market is having a negative impact on digital asset treasury firms, which are piling up major crypto assets on their balance sheets in search of shareholder value.
- Strategy, Evernorth, and Bitmine have collectively incurred unrealized losses of $2.31 billion this year on investments in Bitcoin (BTC), XRP, and Ethereum (ETH). The overall market decline is also having an impact on stock prices.
- Santiment analysts note the disconnect between Bitcoin whale selling and retail buying, warning that this is not a good sign for a market recovery. Meanwhile, other analysts are optimistic that BTC price will reach the new ATH by the end of the year if macro conditions improve.
The ongoing cryptocurrency market decline has put increased pressure on the prices of Bitcoin and major altcoins. Top companies in the digital asset treasury (DAT) market, including Strategy, Evernorth, and Bitmine, are experiencing significant unrealized losses on their investments in Bitcoin (BTC), XRP, and Ethereum (ETH).
According to data obtained by a cryptocurrency analysis company. cryptoquantthe market downturn has had a major impact on large positions in Bitcoin and altcoins, highlighting volatility and significant risk exposure for large investors.
Strategies, Bitmine, and Evanorth face unrealized losses of $2.3 billion due to cryptocurrency market crash
Bitcoin fell below $100,000 for the first time this year following a widespread market collapse on October 10th. As a result, the stock prices of these companies fell to historic lows.
Bitcoin holdings came under significant price pressure across prominent DATs. MSTR’s price has fallen more than 50%, and Strategy (formerly MicroStrategy) common stock is currently trading at $241, nearing its downside. This directly correlates with the Michael Saylor-founded company’s Bitcoin inventory, indicating the impact of the ongoing bear market trend.
Up to $30.8 billion worth of BTC in Strategy’s vaults was purchased at an average price of $106,000 per coin, with unrealized losses of $120 million. This has had a negative impact on MSTR, which is currently trading 80% below its all-time high. This also highlights how continued cryptocurrency market volatility is impacting the profitability of digital asset treasury companies.
According to data from BitcoinTreasuries.netas of November 3, Strategy held 641,205 BTC on its balance sheet, valued at approximately $65.57 billion, making it the single largest holder of “digital gold.” The company’s holdings are equivalent to approximately 3.05% of the total Bitcoin supply of 21 million coins.
Meanwhile, XRP treasury company Evernorth, which bought 388.7 million XRP (about $1 billion) in a bid to become the largest corporate holder of the fourth-most valuable cryptocurrency, has unrealized losses of $97 million. Furthermore, crypto mining company Bitmine, which added 442,000 ETH ($1.52 billion) to its balance sheet in early October, has unrealized losses of about $2.1 billion.
Market observers are keeping a close eye on whether these crypto treasury companies can withstand a continued bear market.
Santiment Analysts Notice Disparity Between Bitcoin Whale Selling and Retail Buying, Calling It a Worrying Trend
Meanwhile, retail investors are stealing Bitcoin from the bear whale. SaintlyIt’s a troublesome pattern considering the price. Analysts at the company said in a market report released last week that historically prices tend to follow the direction of whale movement rather than retail.
Since October 12th, Bitcoin whales (wallets holding between 10 and 10,000 BTC) have sold approximately 32,500 BTC ($3.32 billion). But Santiment added that smaller retailers are “aggressively buying the push.”
From then until November 4th. bitcoin precI fell From $115,000 to $98,000, representing a 15% decrease. The asset has since recouped much of its losses and recovered to the $103,000 range.
Santiment noted that a “significant disconnect” is emerging between large and small Bitcoin investors, but said the pattern of whale selling and retail buying is a “warning signal.”
Market participants are optimistic that Bitcoin will be able to record a new ATH by the end of the year if the macro environment improves.
However, not all market analysts share the same view. Bitfinex Researcher He told crypto media outlet Cointelegraph that he expects Bitcoin to experience consolidation and some volatility in the short term, rather than a “clear sprint” to new highs. According to their analysis, ETF inflows in early October pushed the price to around $125,000, then the macro shock in mid-month and the expiration of major options led to profit-taking and the price fell to the $100,000 range.
On Friday, the Spot Bitcoin ETF snapped a six-day streak of outflows, resulting in $2.04 billion leaving the market. Bitfinex believes Bitcoin could rally toward $130,000 if weekly inflows return to above $1 billion and the macro environment improves.
Meanwhile, Jake Kenneth, senior research analyst at Nansen, said that while BTC has historically experienced year-over-year gains, recent liquidation trends and the collapse of market structure make that “much less likely” at this stage. However, he said there is still room for a “meaningful rally” towards the end of the year, with a decisive shift in market momentum that could trigger Bitcoin to reach new all-time highs.
At the time of writing, Bitcoin (BTC) is trading at $$101,883.93 – up 1.97% in 24 hours.
