The first signs of a potential unwind in digital asset treasuries emerged this week as two firms appeared to sell part of their holdings. <\/p>\n
Two digital asset treasury (DAT) companies moved to cash out part of their crypto holdings this week, after months of non-stop accumulation<\/a> across the emerging DAT sector. The moves triggered speculation that corporate crypto treasuries may be starting an early-stage, but long-predicted<\/a> unwind<\/a>.<\/p>\n Ethereum treasury company ETHZilla<\/a> said in a Oct. 27 press release<\/a> that it had sold roughly $40 million of ETH and used proceeds to repurchase about 600,000 of its shares for roughly $12 million under a previously authorized $250 million buyback program<\/a>. The firm currently holds over 102,000 ETH in its reserve, placing it in the top-five publicly traded ETH holders, per data from CoinGecko<\/a>. <\/p>\n Also this week, on-chain data shows that Sequans<\/a>, a Bitcoin treasury firm holding 3,205 BTC, moved nearly 1,000 BTC to an address that appears to be a hot wallet on Coinbase Prime. <\/p>\n ETHZilla said in the release that the firm \u201cintends to continue to sell ETH to repurchase its shares until the discount to NAV is normalized,\u201d while retaining about $400 million of ETH for future initiatives.<\/p>\n According to ETHZilla\u2019s website<\/a>, the company\u2019s mNAV \u2014 a ratio of the firm\u2019s market capitalization to the dollar value of its crypto holdings \u2014 was standing at 0.62 as of Oct. 23, which means its stock was trading at a substantial discount to the underlying value of its holdings. Following the sale, ETHZilla\u2019s shares on Nasdaq jumped 5.42%, per data from Google Finance.<\/p>\n Sequans, on the other hand, has yet to confirm its Bitcoin sale. Blockchain analyst Emmett Gallic reported<\/a> in an X post on Oct. 28 that Sequans moved 970 BTC to an address on Coinbase Prime that he says<\/a> “is usually used for sales.”<\/p>\n If confirmed, it would be Sequans\u2019 first significant BTC sale since launching its treasury strategy. Sequans\u2019 shares amid the report jumped 4.68%. As of press time, Sequans\u2019 website shows<\/a> that the company\u2019s mNAV metric stands at around 0.74. Per CoinGecko, the firm is currently ranked as the 34th-largest Bitcoin DAT.<\/p>\n The Defiant reached out to Sequans for comment on the transaction, but hasn\u2019t heard back by press time.<\/p>\n The moves have sparked mixed reactions on X. Some argue<\/a> that selling crypto to fund share buybacks isn\u2019t acceptable for a digital asset treasury entity, suggesting the companies could instead borrow against cryptocurrency or raise more capital. Others noted<\/a> that crypto sales and buybacks should be considered when the firm\u2019s mNAV turns negative.<\/p>\n