Written by: ChandlerZ, Foresight News
On November 3, the U.S. stock-listed semiconductor company Sequans Communications (NYSE:SQNS) redeemed 50% of its convertible bonds by selling 970 bitcoins. This transaction reduced the company's total debt from $189 million to $94.5 million. Sequans currently holds 2,264 bitcoins, down from 3,234 previously. Based on current market prices, the company's net asset value in bitcoins is approximately $240 million, and the debt-to-net asset value ratio has decreased from 55% to 39%.
This debt reduction is expected to enhance the company's previously announced ADS buyback plan. Sequans focuses on wireless 4G/5G cellular technology in the Internet of Things sector and announced earlier this year that it would adopt bitcoin as a primary asset allocation.
Similarly, the Ethereum treasury company ETHZilla (stock code ETHZ) announced at the end of October that it had sold approximately $40 million worth of ETH to advance its stock buyback plan. Previously, the ETHZilla board had authorized a stock buyback plan of up to $250 million in August. According to the company's announcement, "ETHZilla plans to use the remaining funds from the sale of Ethereum for additional stock buybacks and intends to continue selling Ethereum to repurchase stock until its share price returns to a normal level relative to net asset value (NAV)."
ETHZilla is not the only Ethereum treasury to approve a stock buyback plan. The second-largest Ethereum treasury, SharpLink Gaming (SBET), also approved a stock buyback plan of up to $1.5 billion to repurchase shares when its stock trading price equals or falls below its cryptocurrency holdings' net asset value.
Other cryptocurrencies are no exception. The SOL treasury company Forward Industries announced that it had submitted a resale prospectus supplement to the U.S. Securities and Exchange Commission and authorized a new $1 billion stock buyback plan. The company's board authorized the stock buyback plan on November 3, allowing the company to repurchase up to $1 billion of its outstanding shares, with authorization valid until September 30, 2027. The buyback can be conducted through open market purchases, block trades, and private negotiated transactions. The resale prospectus supplement registered some common stock issued in a private placement in September 2025, allowing designated shareholders to resell these securities, but the company will not receive any proceeds from any potential resale.
When treasury companies no longer hoard coins but sell crypto assets to repair their balance sheets and maintain stock prices, has the DAT model reached its end?
Stock Prices Slump, Generally Down from Highs
As the crypto market continues to decline following the October black swan event, skepticism about the DAT model is growing. A few months ago, these companies were viewed by the market as wealth levers in the crypto bull market. However, the reversal in market conditions has subjected this high elasticity, high leverage model to a brutal correction.
Market data shows that the leading stock Strategy (MSTR) has fallen nearly 55% from its peak in this bull market, with a year-to-date decline of over 15%. Other altcoin treasury companies have experienced even more severe declines, with many losing up to 90% from their highs. Just yesterday, MSTR fell another 6.88%, bringing its total decline from the peak to 54.69%.
Stock price changes for Strategy over the past year
Ethereum treasury Bitmine (BMNR) fell 7.93% yesterday, down 75.61% from its peak; another company, SharpLink Gaming (SBET), fell 10.77% yesterday, down 90.76% from its peak; BTCS Inc (BTCS) fell 9.12% yesterday, down 63.61% from its peak; SOL treasury Upexi (UPXI) fell 8.85% yesterday, down 84.71% from its peak; DeFi Development (DFDV) fell 9.41% yesterday, down 83.49% from its peak; LTC treasury Lite Strategy (LITS) fell 8.33% yesterday, down 80.42% from its peak; TRX treasury Tron Inc (TRON) fell 9.13% yesterday, down 82.87% from its peak.
S&P Issues First Rating for Strategy, Assigns "Junk B-"
S&P Global Ratings recently issued its first credit rating for Strategy, assigning it a "junk B-." This is also the first formal rating given by a major international rating agency to a publicly traded company with bitcoin as its core asset. S&P pointed out that while Strategy holds approximately 640,000 bitcoins, valued at about $74 billion at current market prices, the company's debt and dividends are denominated in U.S. dollars, creating a significant currency mismatch risk. If the price of bitcoin were to drop significantly, the company would face liquidity constraints and even the risk of debt restructuring.
As of October 2025, the total related debt is close to $15 billion, of which $5 billion in convertible bonds will gradually mature starting in 2028, with over $640 million in preferred stock dividends needing to be paid each year. S&P noted in its report that this highly concentrated structure in a single asset makes the company's capital system fragile; if the price of the coin fluctuates sharply, it may be forced to sell assets or restructure debt, which is viewed as a near-default action in the credit rating system. S&P also acknowledged the company's ability to raise funds in the capital markets and its management of convertible bond risks, stating that if the company can reduce its reliance on convertible bond financing and enhance dollar liquidity in the future, the rating may be upgraded.
The focus of the market is shifting. In the past, the pricing logic of capital markets for DAT companies was extremely simplistic; as long as they held a large amount of bitcoin or Ethereum, their balance sheets would automatically receive valuation premiums. However, as coin prices weaken and liquidity tightens, this narrative is beginning to fail. Investors are returning to the most fundamental question: where is the company's cash flow? Can it maintain operations without relying on rising coin prices? In other words, holding coins no longer equates to value. The volatility of treasury assets is being re-evaluated as a risk factor rather than a growth engine. The market is beginning to reward those companies that can manage risks, optimize structures, and control leverage, rather than blindly increasing their positions.
At the same time, the differentiation among DAT companies is becoming increasingly apparent. Bitcoin and Ethereum treasury companies can still attract some institutional attention due to their asset liquidity and brand stability, but the narrative around altcoin treasuries is fading. Altcoin DATs like Forward, Upexi, and HYPD, which once captured market attention through themes and high leverage, are now among the sectors experiencing the most severe pullbacks. The crash in October was essentially a liquidation. Blue-chip DATs are deleveraging and repairing their balance sheets by selling coins, while altcoin treasuries are being passively forced out amid the collapse of leverage. The cyclical nature of the crypto market once again confirms a simple rule: during an uptrend, leverage acts as an amplifier; during a downtrend, it becomes a noose.
When the market no longer pays for stories, companies must regain trust through structure, strategy, and transparency. The future of DAT will no longer be synonymous with crypto faith but will evolve into a more mature form of asset management, potentially becoming more cautious and complex.
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