Bull market engine backlash the market, the digital asset treasury company faces a life-or-death test.

The listing companies on Digital Asset Treasuries (DAT) are transitioning from being market boosters last year to potential sources of systemic risk. With the sharp decline in cryptocurrency prices, these companies that have hoarded digital assets as a core strategy are facing the risk of forced selling, triggering a chain reaction in the market. The business logic of these DAT companies is to continuously accumulate specific cryptocurrencies in order to obtain a stock premium above the net asset value in the secondary market. However, after experiencing the most serious round of cryptocurrency market selling since the collapse of FTX, this narrative is showing cracks. Hayden Hughes, managing partner of Tokenize Capital, pointed out in an analysis of the top 20 DATs that, as prices fall, some companies may be forced to sell their held cryptocurrencies, and the real risk is not the selling itself, but the impact on investor confidence. Once DATs start to become "collective sellers," the market narrative may quickly reverse. Since Bitcoin peaked at $126,000 in October last year, it has fallen by nearly half, leading to a total cryptocurrency market capitalization evaporating by about $2 trillion. Hughes stated that those DATs lacking actual revenue and continuous operating business will have to maintain basic operations through selling cryptocurrencies. "For digital asset treasuries companies without income, physical business, and unable to exit positions without disrupting the market, this downturn is a threat to survival," Hughes wrote in his report. He described this trade as a "Hotel California trade, where you can check in but you can never leave." However, some DATs may still survive in the form of "zombie companies." Pratik Kala, research director at Apollo Crypto, pointed out that these companies can obtain cash flow through tokenized financing, small-scale asset sales, or options strategies. In fact, cases of DATs selling tokens are no longer rare. Ethzilla Corp. (ETHZ.US), supported by Peter Thiel, sold $74.5 million worth of Ethereum in December of last year, marking its second reduction; FG Nexus (FGNX.US) disclosed selling nearly 11,000 Ethereum in November for stock buybacks; and Sequans Communications (SQNS.US) also sold some Bitcoin in the same month to repay debts. Hughes emphasized that the threat to the broader market is not direct selling pressure but "narrative contagion." Once DATs disclose selling cryptocurrency assets to maintain operations, it will "completely shatter the investment logic that these companies are long-term, steadfast hoarders of coins." Against the backdrop of falling DAT stock prices and continuous outflows of ETF funds, in just the past month, the net outflow of funds from the US Bitcoin spot ETF exceeded $2 billion, pushing the price of Bitcoin towards the range of $50,000 to $55,000. Data shows that over the past year, the median drop in stock prices of 150 large DATs reached 62%, exceeding even the drop in Bitcoin itself, with many companies' stock prices already lower than the value of the cryptocurrencies they hold. In terms of risk exposure, Hughes believes that Enlivex Therapeutics Ltd. (ENLV.US) hoarding the illiquid token RAIN, Twenty One Capital Inc. (XXI.US) hoarding Bitcoin, and Evernorth Holdings Inc. (XRPN.US) hoarding XRP are facing the highest risks. Among them, Twenty One Capital is supported by SoftBank Group and stablecoin issuer Tether Holdings Ltd. In contrast, Trump Media & Technology Group (DJT.US) holding Bitcoin and Cronos tokens, and BitMine Immersion Technologies Inc. (BMNR.US) holding Ethereum, are considered to have a medium to high probability of survival. "The 'Hotel California trade' is undergoing a reality stress test," Hughes wrote, "for the most vulnerable companies, the music has already stopped."