Rich by Coin

Crypto-holding equities have delivered strong returns in buoyant markets, but in downturns they decline much more than the cryptocurrencies they hold. The relationship between stock prices and crypto assets often reverses sharply when markets turn lower.

For example, since October 2025, Bitcoin has fallen roughly 30%, while a leading crypto-holding company, Strategy, has plunged about 57%. That instance underscores the outsized sensitivity of these equities to crypto price moves.

These stocks are equities, not crypto assets, so the premium investors assign to future crypto prospects can vanish in a bear market, causing prices to fall well beyond underlying asset values. Many crypto-holding firms also finance crypto purchases with equity issuances, convertible bonds, or debt, creating leverage that leaves debt burdens intact even as crypto prices slide. This can widen stock declines. Convertible bonds can add selling pressure when volatility rises.

Separately, the advent of ETFs that track crypto prices more closely has reduced exposure to company-specific risks and dilution; as a result, in bear markets funds tend to move from crypto holdings to ETFs. Thus, while crypto-holding stocks can generate strong returns in bull markets, they present structural risk and potentially larger losses than the crypto assets themselves in downturns.