Original Article Title: "After the Cryptocurrency Market's Big Crash, How Are DAT Companies' Stocks Holding Up?"

Original Article Link: David, Deep Tide TechFlow

On the 10th, President Trump announced a 100% tariff on Chinese goods on Truth Social. This news instantly ignited panic in the global financial markets.

Within the next 24 hours, the cryptocurrency market experienced the largest liquidation event in history, with over $19 billion in leveraged positions being force-liquidated. Bitcoin plummeted from $117,000 to below $102,000, experiencing a one-day drop of over 12%.

The U.S. stock market also could not evade this misfortune. By the close of October 10th, the S&P 500 Index fell by 2.71%, the Dow Jones Industrial Average dropped 878 points, and the Nasdaq Composite Index declined by 3.58%, marking their largest single-day declines since April.

However, the real disaster area is for those companies that hold cryptocurrency as part of their treasury reserves, known as DAT (Digital Asset Treasury) companies.

As the largest corporate Bitcoin holder, MicroStrategy's stock price also suffered; other companies with crypto asset reserves experienced more pronounced dives. According to after-hours trading data, investors continued to sell off.

For these companies exposed to both the cryptocurrency and stock market risks, has the worst moment passed?

Why Did DAT Companies Experience a Harsher Drop?

The first impact DAT companies had to face was directly on their balance sheets. Taking MicroStrategy as an example, the company holds approximately 639,835 bitcoins. When the price of Bitcoin dropped by 12%, it meant that its asset value evaporated nearly $10 billion in an instant.

This type of loss must be recorded as an "unrealized loss" under accounting standards. Although it is not a realized loss as long as they do not sell, the numbers on the financial statements are real.

As an investor, what you see is the core asset of a company rapidly depreciating. There is also a multiplier effect on market confidence.

In early 2025, MicroStrategy's stock traded at a net asset value (NAV) premium of up to 2x, but by the end of September, it had compressed to 1.44x; currently, it's around 1.2x.

Some other companies, mNAVs are almost all regressing towards 1, with some falling below 1. These number changes reflect a harsh reality: the market's confidence in the DAT model is being shaken in extreme market conditions.

During a bull market, investors are willing to give these companies a premium, with the narrative being at the forefront of crypto innovation. But when the market turns, the same story becomes an unnecessary risk exposure.

Cryptocurrencies other than Bitcoin have suffered significant technical damage in this leverage-induced major downturn, with some even instantly crashing to zero; even large-cap altcoins have experienced drastic price drops due to insufficient liquidity.

Stocks of companies holding these assets have become the preferred short-selling targets in the deteriorating market sentiment.

During market panic, investors need to liquidate quickly. While the Bitcoin market trades 24/7, large sell-offs can significantly impact the price. In comparison, selling stocks such as MSTR or COIN on the Nasdaq is much easier.

Selling billions of dollars' worth of gold does not disrupt the market, but selling $700 billion worth of Bitcoin may cause price collapse and trigger massive liquidation; this liquidity difference has made stocks of DAT companies a channel for rapid fund withdrawal.

What's worse, many institutional investors have strict risk control red lines. When volatility exceeds a certain threshold, they must liquidate, whether they want to or not. DAT companies happen to be one of the highest volatility targets.

To make an inappropriate analogy, if a regular tech company is sitting on one boat, then a DAT company is like tying two boats together, one sailing in the stock market's waves and the other struggling in the cryptocurrency market storm.

When both sides encounter bad weather simultaneously, the impact they withstand is not additive, but multiplicative.

Who's the Hardest Hit, Who Resists the Most?

Looking at the previous day's DAT company price drop list, you can clearly see a pattern: the smaller the company, the harder the fall.

Forward Industries fell by 15.32%, with an mNAV of only 0.053. BTCS Inc. fell by 12.70%, Helius Medical Tech fell by 12.91%.

These small companies with market caps of less than $1 million can hardly find buyers in a panic. In comparison, MicroStrategy, despite being the largest Bitcoin holder, only experienced a drop of 4.84%.

The logic behind this is quite simple: liquidity.

When panic strikes, the bid-ask spread of small-cap stocks widens significantly, and a slightly larger sell order can crash the price.

In this list, Tesla stands out as an anomaly. It only dropped by 5.06%, which is one of the smallest declines, but in terms of data, its mNAV stands at 985.96. This number implies that the market valuation of Tesla is nearly 1000 times its holding value.

Since Tesla is fundamentally not a DAT company, holding coins is just a side activity. Investors buy Tesla based on their optimism about the electric vehicle business, and the fluctuation of Bitcoin has minimal impact on its valuation; the same reasoning applies to Coinbase as well, which dropped by 7.75%, but as an exchange, it has tangible fee revenue.

On the other hand, for those pure DAT companies, the situation is completely different.

MicroStrategy has an mNAV of only 1.28 times, almost trading at holding value. Galaxy Digital has an mNAV of 5.49 times, while MARA Holdings is at 1.29 times. The market valuation of these companies is essentially their crypto asset value plus a small premium. When the crypto market crashes, they have no other business to cushion the fall.

When a company's market value is nearly equal to the value of the crypto assets it holds (mNAV close to 1), it signifies that the market believes this company has no additional value besides holding coins.

Bitmine has an mNAV of 0.98, and American Bitcoin, although not disclosed, is also estimated to be very low. These companies have essentially become Bitcoin ETFs disguised as listed companies.

The question is, now that there are actual Bitcoin ETFs available for purchase, why would investors still choose to indirectly hold through these companies?

This might explain why, during a panic, these low mNAV companies experience even greater declines. They bear both the risk of crypto assets and the risk of the stock market, yet offer no additional value.

In a few hours, the US stock market will open. After a weekend of calm, will market sentiment improve? Will those small-cap DAT companies with drops exceeding 10% continue to be sold off, or will there be bargain-hunting funds entering?

From a data perspective, companies with mNAV below 1 may present oversold opportunities, but they could also be value traps. After all, when a business model itself is in question, cheap might not necessarily be a reason to buy in.

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