Crypto crash as market rout wipes off $1 TRILLION from shares

Crypto-hoarding firms are dumping their holdings, as share prices crash amid a $1 trillion rout on the markets. The firms are companies that hold significant cryptocurrency reserves as part of their corporate treasury management.

Investors initially rushed to pour their money into the companies, sparking a huge surge in equity prices and bitcoin values. However, the mania for “digital asset treasury” businesses has started to unravel at an alarming rate. Strategy – the world’s biggest corporate bitcoin holder led by Michael Saylor – has seen its shares fall by 50% over the last three months.

Its market capitalisation has plunged to $49 billion, lower than the value of the $56 billion in bitcoin it holds.

Strategy’s demise is dragging down scores of similar companies, as investors head for the hills.

Roughly $77 billion has been wiped from the stock market value of these companies since their peak of $176 billion in July, according to industry data publication The Block.

“There’s going to be a fire sale at these companies; it’s going to get worse,” said Adam Morgan McCarthy, senior research analyst at crypto data firm Kaiko.

“It’s a vicious cycle. As soon as the prices start tanking, it’s a race to the bottom,” he told the Financial Times.

Saylor earned billions after pivoting his software firm to a “bitcoin treasury” strategy. As part of the pivot, his company purchased over 600,000 bitcoins, transforming his business fortunes.

Other firms to feel the stock market heat include the UK’s biggest bitcoin buyer – The Smart Web Company.

Its share price has plummeted by 44& this year and is now valued at £132 million while the bitcoin it holds is worth about $232 million.

Meanwhile, Bitwise’s Chief Investment Officer Matt Hougan, warned that companies adopting Digital Asset Treasury strategies face an uphill battle maintaining their stock premiums.

His comments have sent shockwaves through the cryptocurrency investment community.