NEW YORK, Feb. 5, 2026 — Publicly traded companies that invested heavily in bitcoin and other cryptocurrencies are now confronting sharp losses as digital asset prices tumble. Enthusiasm for corporate crypto hoarding peaked after former President Donald Trump voiced support for digital assets, while the success of Michael Saylor’s Strategy encouraged executives to reshape balance sheets around bitcoin holdings. Investors poured money into these firms, expecting digital assets to deliver outsized returns, but uncertainty around Federal Reserve policy and weaker performance across risk assets has pushed bitcoin down to $67,651, erasing gains made since mid-2024.

Shares of Strategy slid from $457 in July to $111.27, reaching levels last seen in August 2024. The company also revised its 2025 earnings forecast, outlining a wide range that spans a $6.3 billion profit to a $5.5 billion loss. Other corporate holders are seeing similar outcomes. Smarter Web Company, a UK-based bitcoin buyer, dropped nearly 18 percent, while Nakamoto Inc and Japan’s Metaplanet declined about 9 percent and 7 percent, respectively.

Investor Caution Intensifies

The sell-off has altered how investors view companies with large digital asset holdings, particularly those using digital asset treasuries, or DATs, as a way to offer public exposure to crypto. What was once seen as a bold financial move is now being scrutinized for risk, liquidity limits, and balance-sheet volatility.

Liquidity Risks Come into Focus: Analysts say firms holding bitcoin and other tokens may find it harder to raise capital as share prices weaken. That matters because many of these companies relied on equity issuance to fund further crypto purchases. When valuations fall, that funding route narrows, forcing executives to rethink acquisition plans and short-term financial priorities.

Nic Puckrin, co-founder of Coin Bureau, described the downturn as a transition phase rather than a brief pullback. He said it could take months for sentiment to stabilize, particularly if tighter monetary conditions reduce appetite for speculative assets.

Policy Signals Add to Uncertainty: Potential changes at the Federal Reserve are also weighing on sentiment. Analysts have flagged the possibility that a new Fed chair could shrink the central bank’s balance sheet, a move that would reduce liquidity available to risk assets. That prospect has added another layer of uncertainty for companies whose valuations are closely tied to crypto prices.

Executives are now weighing how to protect shareholder value without relying on further token accumulation, a strategy that once drew strong investor interest but now carries heightened downside risk.

Broader Ripple Effects Across Digital Assets

The downturn is not limited to bitcoin-heavy balance sheets. Companies holding other cryptocurrencies are also feeling the strain. Alt5 Sigma, which invested in the Trump family-backed WLFI token, fell 8.4 percent. SharpLink Gaming, with exposure to ether, dropped 8 percent, while Forward Industries, tied to solana, slid nearly 6 percent.

These declines underline how closely corporate valuations have become linked to crypto price movements. Analysts warn that prolonged weakness could trigger a cycle where falling token values restrict liquidity, which then limits financial flexibility and worsens share performance.

Lessons in Timing and Strategy

The crash highlights the risks of buying digital assets near market peaks. Firms that built large crypto positions during periods of optimism are now exposed to steep swings driven by policy signals and broader market shifts. Executives are exploring ways to support dividends, protect operations, and reassure investors while asset values remain under strain.

Some companies may recover if crypto markets regain footing, but the current slump stands as a reminder that digital assets can magnify losses as quickly as they once delivered gains. Corporate exposure to crypto demands patience, discipline, and acceptance that market sentiment can change faster than balance sheets can adapt.