Cryptocurrency reserve companies (DAT) has accumulated crypto to date and made promises to avoid selling. Their stories are based on exactly this. Buying more cryptocurrencies, borrowing with more share offerings, and further growth of reserves with the cash obtained. But here the cycle seems to be broken.
Ethereum Last Minute
It sounds terrible when reserve companies start selling their holdings of cryptocurrencies. Saylor ever BTC By constantly buying without selling, it increased its reserves to tens of billions of dollars. This is exactly what other companies want to do.
- With borrowing cryptocurrency is taken.
- Share value increases.
- More shares are issued and more cryptocurrencies are purchased with the cash obtained.
- Company value and shares rise even higher.
- Cryptocurrency prices rises and there is room for more shares to be issued, then step one is repeated.
However, ETHZilla just announced that it sold $40 million of ETH to fund its share buyback. According to Saylor’s strategy, what he should have done was exactly the opposite. In its last-minute announcement, the company wrote:
“Since consummating the sale on October 24, 2025, the Company has repurchased approximately 600,000 shares of common stock for approximately $12 million under a $250 million share repurchase program approved by the current board of directors. ETHZillaplans to use the remaining proceeds from the ETH sale for additional share repurchases and intends to continue selling ETH to buy back its shares until the reduction in NAV normalizes.”
McAndrew Rudisill, chairman and CEO of ETHZilla, said;
“We are leveraging the strength of our balance sheet, including reducing our ETH holdings, to execute share buybacks. While our shares are trading at a significant discount to NAV, we expect these buybacks to be immediately accretive with the cash generated from the sale of ETH.”
“While our shares are trading below NAV, we plan to take advantage of opportunities and increase the Company’s NAV per share by repurchasing shares, reducing the number of shares available for share lending/borrowing activities.”
Bear Signal
Company worth 400 million dollars ETH continues to hold, but the value of ETH per share remains below what it should be and this sale by ETHZilla offers a good projection of how crypto reserve companies may go bankrupt. This situation means that crypto reserve companies will be indefinite. cryptocurrency While it defeats the accumulation story, it also gives us an idea about how new bear markets will begin. When this happens, I will remind you of this last minute development that took place on October 27 and write “we received the first big signal here.”
