Is the era of holding coins and telling stories over? A complete record of the bubble burst of digital asset reserve companies

[BlockBeats] James Butterfill, Head of Research at a leading crypto asset management firm, recently released a report and didn’t mince words: companies that rely on hoarding tokens and spinning stories—their bubbles have pretty much burst.

Digital asset reserve firms that were riding high this summer saw their valuations soar to 3 to 10 times their net asset value—that is, for every $1 worth of tokens they held, the market valued them at $3 or even $10. Now? They’ve come crashing down, with valuations dropping to 1x or even lower. This playbook of using token treasuries as their core growth story has met a harsh reality check.

What’s next? Butterfill sees two paths: either prices keep falling, triggering panic selling; or these companies grit their teeth and hold on, waiting for the market to recover. He personally favors the latter, citing an improving macro environment and the potential for a rate cut in December, which would support the crypto market.

But the real trouble isn’t short-term volatility. The problem lies with these companies themselves—many have been aggressively hoarding tokens on the open market, building massive treasuries, but their actual business operations are a mess, lacking a sustainable revenue model. This approach has already maxed out their credibility.

Investors aren’t naïve anymore, and patience is wearing thin for models that have no real business income and rely solely on equity dilution and single-asset bets. There is some good news, though: some stronger companies are starting to integrate Bitcoin into regulated treasury and foreign exchange management systems, which is a much healthier approach.