Ethereum Selling Pressure and Institutional Digital Asset Trends: Strategic Implications of FG Nexus's ETH Sale and DATs' Market Entry

The recent large-scale Ethereum (ETH) sale by FG Nexus-a digital asset treasury (DAT) firm-has reignited debates about selling pressure in the crypto market and the broader strategic challenges facing institutional players. This move, part of a broader trend of DATs liquidating assets to fund share buybacks, underscores the fragility of a sector where stock prices often lag far behind the value of underlying crypto holdings. As Ethereum faces renewed downward pressure, the interplay between institutional behavior and market dynamics demands closer scrutiny.

FG Nexus's ETH Sale: A Case Study in Forced Liquidity

FG Nexus sold 10,922 ETH (~$33 million at current prices) in the recent quarter to repurchase 8% of its outstanding shares at a discount to net asset value (NAV). While the firm framed this as a value-creation strategy, the transaction triggered a 2% short-term drop in ETH prices and a near-10% decline in FGNX shares. This mirrors similar actions by peers like ETHZilla, which sold $40 million in ETH in October 2025 for the same purpose.

The strategic implications are twofold: first, such sales directly inject selling pressure into Ethereum's market, particularly when executed at scale; second, they highlight the structural misalignment between DATs' stock valuations and their crypto-backed NAVs. For instance, FG Nexus's shares traded at $3.45, well below its reported NAV of $3.94 per share. This gap-common across the DAT sector-forces firms to liquidate assets to prop up equity, creating a self-reinforcing cycle of selling.

DATs Under Pressure: A Systemic Risk?

The FG Nexus case is emblematic of a broader crisis in the DAT sector. According to a report by Decrypt, firms like BitMine, Metaplanet, and SharpLink collectively face $5.8 billion in unrealized losses on their crypto holdings, with Ethereum accounting for a significant portion. BitMine alone holds $4.44 billion in Ethereum-related losses, while its market-cap-to-net-asset-value (mNAV) ratio has fallen to 0.73x.

This compression of mNAV ratios-where stock prices trade below the value of underlying assets-has severe consequences. As Armando Aguilar of TeraHash notes, it "makes it harder to raise capital," pushing DATs toward forced selling to meet operational needs. If multiple firms adopt this strategy simultaneously, the result could be a "steady source of downward pressure" on crypto markets, particularly Ethereum, which already faces structural selling from DATs.

Ethereum's Role in DATs: Secondary to Bitcoin, But Not Insignificant

While Bitcoin dominates DAT holdings, Ethereum's role remains significant. As of Q3 2025, DATCos held $137.3 billion in crypto assets, with Ethereum accounting for 13.2% of the total value compared to Bitcoin's 82.6%. This reflects Ethereum's position as a secondary but critical asset for institutional players. Notably, Ethereum DATCos were the second-largest spenders in 2025, with $7.9 billion in purchases concentrated in August 2025 when ETH hit an all-time high of $5,000.

However, Ethereum's smaller market share also means its price is more sensitive to DAT-driven selling. Unlike Bitcoin, which benefits from broader institutional adoption and macroeconomic tailwinds, Ethereum's value is more tightly coupled with the liquidity strategies of DATs. This dynamic could amplify volatility in the short term, especially as DATs continue to grapple with compressed mNAV ratios.

Strategic Implications for Investors and the Market

For investors, the FG Nexus case and broader DAT trends highlight three key risks:
1. Short-Term Volatility: Large ETH sales by DATs could test critical support levels (e.g., $2,850) and delay Ethereum's recovery.
2. Systemic Selling Pressure: If forced liquidations become widespread, they could create a negative feedback loop, further depressing crypto prices and DAT stock valuations.
3. Long-Term Sustainability: DATs' ability to weather macroeconomic headwinds depends on resolving investor skepticism and stabilizing mNAV ratios. Without intervention, the sector risks a wave of insolvencies or mergers.

Conversely, Ethereum's institutional adoption could stabilize if DATs pivot from forced selling to strategic buybacks or diversification. However, this requires a reversal of current trends-a scenario that seems unlikely in the near term.

Conclusion

The FG Nexus ETH sale is not an isolated event but a symptom of deeper structural issues in the DAT sector. As Ethereum faces renewed selling pressure, the interplay between institutional liquidity strategies and market dynamics will shape its trajectory. For investors, the lesson is clear: the crypto market's institutional layer is both a source of strength and vulnerability. Monitoring DAT activity-particularly Ethereum-related sales-will be critical to navigating the next phase of this volatile market.