## Cryptocurrency Treasury Stocks Fall Into the "Riches That Cannot Be Spent": Huge Credit Limits but No Access

After months of actively boosting the market at the beginning of the year, crypto fund management companies like Strategy, BitMine, and Metaplanet suddenly went silent as the market experienced adjustments. The strange thing is: these companies hold hundreds of billions of USD in potential purchases, but they cannot—or do not want to—use them.

### The Consequences of the "Infinite Revolving Door" Mechanism

To understand this situation clearly, we need to examine the financing mechanism of Strategy—an exemplary model for most modern treasury companies. Strategy raises capital through two main channels:

**First is convertible bonds**: the company borrows money at very low interest rates, then uses it to buy Bitcoin. By February 2025, Strategy had raised $8.2 billion through this method.

**Second is the ATM (At-The-Market) issuance plan**: when Strategy’s stock price exceeds the corresponding net asset value per share, the company can issue new shares to acquire digital assets. Strategy has established two ATM plans, each worth $21 billion, with a current remaining balance of $30.2 billion.

The problem lies in the fact that these amounts are mainly in the form of unissued shares. To convert them into cash, Strategy must sell them on the market. When mNAV (market price-to-NAV ratio) is above 1, selling shares is profitable—the company gains more cash than the equivalent Bitcoin value, then uses it to buy more Bitcoin, creating an "infinite revolving door."

But when mNAV falls below 1—specifically from November—this mechanism reverses. Selling shares at this point means taking a loss. Therefore, even if Strategy holds a large amount of shares that could be sold, they still cannot cash out into crypto assets. Additionally, Strategy recently issued an extra $1.44 billion in shares at a discount solely to accumulate cash for dividend payments and current debt interest.

### When the "Nominal Ammunition Depot" Becomes a Useless Mine

Currently, hundreds of crypto treasury companies operate in the market, but their actual purchasing power is insignificant. There are two common scenarios:

**Type one** includes companies holding crypto assets from mergers or legacy estates, not from debt issuance. Cantor Equity Partners (CEP), ranked third in Bitcoin holdings with an mNAV of 1.28, mainly obtained Bitcoin through aggregation with Twenty One Capital. Since July, this company has not recorded any notable buying activity.

**Type two** applies a similar strategy to Strategy, but due to falling stock prices, their mNAV remains below 1. Their ATM limits are tightly locked, only able to operate again if stock prices recover above 1.

Besides debt issuance and share sales, a more direct "ammunition stockpile" is cash reserves. BitMine— the largest DAT company on Ethereum—despite having an mNAV below 1, maintains a buying plan thanks to holding $882 million in unencumbered cash. Chairman Tom Lee recently announced that BitMine bought nearly 100,000 ETH last week—double the amount from two weeks prior.

CleanSpark announced at the end of November a plan to issue $1.15 billion in convertible bonds to accumulate Bitcoin. Metaplanet, a Japanese publicly listed company, is the most active player, raising over $400 million since November through Bitcoin collateralization or share issuance.

Overall, these companies possess a "nominal arsenal" (cash + credit limit) amounting to hundreds of billions of USD, far exceeding any previous bull market period. However, the "real firepower" they can deploy has significantly shrunk.

### From "Leverage Increase" to "Living on Staking"

The reaction of treasury companies is not to wait for prices to recover. Instead, they are beginning to shift strategies. During a bullish market, all they need to do is buy without hesitation—when assets rise, continue borrowing to buy more. But when the market turns, many companies find it harder to raise capital and must also pay interest on previous debt.

Therefore, many are turning to "crypto asset yields"—participating in staking on networks to earn stable rewards, which can then cover interest and operational costs. BitMine plans to launch MAVAAN (Metaverse American Validator Network) in Q1 2026 to stake ETH, expected to generate $340 million in annual revenue. On Solana, companies like Upexi and Sol Strategies can achieve annual yields of around 8%.

This trend also directly influences asset choices. Bitcoin lacks high natural yields, so the growth rate of Bitcoin treasury holdings is slowing down. Conversely, Ethereum can generate profits through staking to pay debts, maintaining steady growth.

Essentially, these are compromises made by treasury companies when facing liquidity crises. When cheap borrowing avenues via stock premiums are blocked, seeking cash flow from staking becomes the last resort. The bitter truth is: "infinite bullets" are just an illusion built on stock premium. When the revolving door is paralyzed by discounts, the market must face reality—these companies are always trend amplifiers, not heroes to save the storm.