This month of December could decide the fate of crypto digital assets: here is the warning of CoinShares for survival

After a turbulent few weeks in the cryptocurrency market, digital asset treasury companies (DAT) are once again in the spotlight, and not for the reasons they had hoped for.

Bitcoin, Ethereum, and the broader market suffered a sharp decline amid macroeconomic concerns, including the possibility of the transmission of the Japanese currency wiped out if the Bank of Japan raises interest rates. Add to that increased volatility, successive liquidations of contracts, and aggressive short trading by major institutions, and you have the perfect recipe for investor panic.

Digital stocks have been hit hard. Companies that were trading at multiples of their net asset value (mNAV) – 3x, 5x, and even 10x over the summer – are now struggling and trading at or below breakeven. The fear is simple: as prices decline, will treasurers be forced to sell cryptocurrencies to repay loans, defend stock valuations, or just to survive?

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According to James Butterville, head of research at CoinShares, the situation is fragile, but not hopeless.

“By the summer of 2025, many digital companies were trading at 3x, 5x, or even 10x their adjusted net asset value and now they are all around 1x or even lower,” Butterville said. “From here, the path bifurcates: either lower prices cause a disorderly decline due to sales, or companies maintain their balances and take advantage of a potential price recovery. We are inclined towards the latter, especially given the better economic background.” And the possibility of an interest rate hike in December, which will support the broader cryptocurrency markets.

If prices continue to fall, short attacks may deepen, especially on companies whose treasuries contain large, illiquid or highly correlated digital asset reserves.

Back in December?

Now he’s wondering if digital businesses are facing a deadly sales cycle… or a setup for a short explosive squeeze. Butterville believes the latter possibility is still very much alive.

“Either lower prices trigger a messy pullback through a selloff or companies hold their balances and take advantage of a potential price recovery,” Butterville said. “We are leaning towards the latter, especially given the improving economic backdrop and the possibility of a rate cut in December, which will support the broader cryptocurrency markets.”

Markets may be approaching a pivotal moment. Inflation is slowing, bond markets are stabilizing, and speculation is growing that central banks, including… Federal Reservemay cut interest rates in December.

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A cut could weaken the dollar, ease pressure on liquidity, and possibly spark a strong recovery in digital assets.

That may be what all digital businesses need in the current storm.

DATs must evolve now – or die

Even if there is a recovery, Butterville argues that the industry must face uncomfortable structural flaws.

“The recent decline in cryptocurrency markets has exposed their structural flaws,” Butterville said. “Several factors contributed to the decline, including the lack of strong operating companies behind treasury strategies, a trend to invest in blockchain stocks, and a general decline in cryptocurrency prices.

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Investors saw a less tolerant decline with:

• Shareholder Dilution
• High concentration of assets
• Company with huge cryptocurrency vaults but no real income
• Companies using public markets to stake tokens instead of building products

He said that this behavior had damaged the credibility of the entire sector.

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The DAT model for the future

Butterfill anticipates a cleaning cycle, liquidating companies driven by motivation and rewarding those that build real economic value.

As the bubble deflates, the market is reevaluating which companies really fit the DAT model and which were simply exploiting motivations, Butterfill said. The future of DATs lies in a return to basics: disciplined treasury management, reliable business models and realistic expectations about the role of digital assets in corporate balance sheets.

He said that the winners of the next tournament will be more like that DATE What was originally designed:

• International company
• Different sources of income
• Use digital assets strategically And not opportunistically
• Long-term budget management The expansion of the treasury is not speculative

If markets stabilize or even trend higher, companies that retain assets rather than liquidate may be positioned for a strong rebound. In that environment, any asset managers with a broad short strategy aimed at DAT stock can quickly unwind, adding to the rising price volatility.

Price cuts in December may be the catalyst.