Ethereum News Today: Ethereum's Plunge Forces DATs' Accumulation Strategy into Existential Crisis

Ethereum's recent plunge below $3,000 has triggered a crisis for digital asset treasury (DAT) firms, erasing a year's worth of gains and exposing vulnerabilities in the strategy of corporate Ethereum accumulation. The price drop has led to a sharp decline in market-to-net asset value (mNAV) ratios for many firms, complicating fundraising and threatening their ability to expand holdings. BitMine Immersion Technologies, the largest publicly traded Ethereum treasury, now faces $3.7 billion in unrealized losses as its mNAV ratio fell to 0.77, according to 10x Research.

The downturn follows a $170 million ETH purchase by BitMine last week, bringing its total holdings to 3.56 million ETH ($11.1 billion), yet the firm's shares have dropped 35% this month, underperforming both ETH and Bitcoin. This mirrors broader industry struggles: 64.3% of Ethereum treasury firms are trading below mNAV, a metric that signals market valuation lagging behind asset holdings. The collapse in prices has also led to a $2 billion outflow from crypto funds in the last week, with Ethereum ETFs shedding $689 million, according to CoinShares.

The crisis has intensified scrutiny of DATs' business models, which rely on continuous asset accumulation regardless of price. BitMine Chairman Tom Lee, however, remains bullish, predicting a "supercycle" for Ethereum akin to Bitcoin's 100x surge since 2017. He attributes current weakness to lingering effects from October's $19 billion liquidation event, which he argues has created a "quantitative tightening" effect as market makers reduce liquidity according to reports. Meanwhile, firms like FG Nexus and ETHZilla have resorted to selling ETH to fund share buybacks, exacerbating downward pressure.

The market's bearish sentiment is reflected in derivatives activity, with a 70% probability assigned to Ethereum hitting $2,750 by year-end, per event contracts. This contrasts with the optimism of early 2025, when Ethereum treasuries peaked in August. The sector's challenges are not isolated to Ethereum: Bitcoin's price has also fallen 35% from its August high, though Strategy (MSTR), the largest Bitcoin treasury, continues buying, adding $835 million in BTC this week according to data.

Industry experts warn that the current environment tests the resilience of DATs. "The $3,000 level is a report card on progress in regulatory and institutional adoption," said Firinne Capital's Jim Hwang. With corporate buyers still in net accumulation, the sector's survival may hinge on Ethereum's ability to rebound swiftly. For now, the market remains in "extreme fear," with liquidations and outflows suggesting a prolonged downturn according to reports.