Digital asset treasury (DAT) firms, viewed as high-beta plays on crypto prices, experienced a sharp sell-off on Friday as the August crypto rally began to cool.
Strategy (MSTR) dropped another 3% on Friday, totaling a 20% decline since July’s peak and 33% from the all-time high in November 2024. The MSTR/IBIT ratio fell to 5.43, its lowest since March, indicating continued underperformance against BlackRock’s iShares Bitcoin Trust (IBIT) and reverting to levels last seen at the beginning of the year.
Other bitcoin treasury stocks also faced declines, with Metaplanet (3350) down 9% and Nakamoto (NAKA) off 12% following its merger with KindlyMD to create a new bitcoin treasury entity.
In contrast, KULR Technology (KULR) saw a gain of over 5% after reporting a remarkable 63% revenue growth year-over-year in its second quarter, attributed to its bitcoin-first balance sheet strategy.
Firms with ETH-centric portfolios suffered steeper losses.
Bitmine Immersion Technologies and SharpLink Gaming, the two leading Ethereum strategy firms, fell 7% and 14%, respectively, early in the session.
Companies focused on Solana also did not escape the downturn. Upexi (UPXI) dropped more than 9%, while DeFi Development (DFDV) was down 5%.
BTC, ETH, SOL rally cools
This trend coincided with bitcoin slipping below $117,000, extending its reversal from Thursday’s brief spike to $124,000, a new all-time high. Ether (ETH) retraced after nearly reaching its record high above $4,800, now struggling to maintain the $4,400 level.
DATs aim to raise funds by selling equity and debt to accumulate cryptocurrencies, a strategy pioneered by Michael Saylor’s efforts. They are seen as a high-beta play on crypto prices, escalating during upward movements but suffering larger declines in downturns.
Most crypto-related stocks also experienced declines during the session. Bitcoin miner Riot Platform and digital asset conglomerate Galaxy (GLXY) fell approximately 8%. Coinbase (COIN) saw a modest drop of 1.6%, while Circle (CRCL) gained 3.5% following a successful secondary share offering.
Read more: Bitcoin Rally Stalls on U.S. Inflation, Policy Whiplash: Crypto Daybook Americas
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