Corporate Bitcoin hodlers are playing chicken with the market. Despite watching Bitcoin crash from its October high of $126,000 down to $78,000, treasury firms are clutching their crypto like it’s the last lifeboat on a sinking ship. Millions in the red? No problem. Debt covenants breathing down their necks? Whatever.
The crypto treasury boom of 2025 was something to behold. From just 70 firms in January to over 130 by mid-year, these companies poured a staggering $42.7 billion into digital assets. Nearly half that amount—$22.6 billion—came in Q3 alone. Talk about FOMO. Portfolio experts recommend these firms should have implemented risk mitigation techniques to better weather market volatility.
Now they’re underwater. Big time. Many financed their Bitcoin shopping sprees with convertible notes, PIPE deals, and good old-fashioned debt. Those financing terms are coming back to haunt them. Market observers estimate 10-15% of positions face potential forced liquidation—that’s $4.3-6.4 billion worth of Bitcoin that could flood the market.
Yet the selling hasn’t materialized. Management teams are doubling down on their “diamond hands” strategy. It’s like watching someone refuse to fold a terrible poker hand while their chip stack dwindles. Unlike smaller DATCos, MicroStrategy continues to accumulate Bitcoin, recently purchasing 8,178 BTC around $93,000.
The liquidity crunch isn’t helping. Bitcoin’s order book depth at a 1% price band dropped from $20 million in early October to $14 million by mid-November. Even small selling volumes now create outsized price impacts.
There was one lifeline. MSCI decided not to exclude crypto treasury firms from its indexes—at least not yet. Strategy and others dodged that bullet, but a broader review of “non-operating companies” looms on the horizon. The decision spared these companies from significant investor withdrawals that could have worsened their financial situation.
The truth will come out in Q4 earnings reports. Early 2026 disclosures will reveal who held and who folded. Until then, institutional investors are sitting tight, watching volatility shrink to an unusually calm 20-30%.
The big question: How long can these firms keep playing chicken when there’s $4.3-6.4 billion worth of Bitcoin at risk of forced liquidation?
