Archive · 15 Nov 2025
New Crypto Deals Risk Retail Investors After $17 Billion Wipeout
Imagine some grown-ups want to buy a lot of digital coins, like Bitcoin.
Instead of using their own money to buy coins on a regular market, they create a special company that holds the coins.
Lately, they've been giving the company their own coins directly, instead of cash.
They decide what their coins are worth.
This is risky because if the coins later become worth less than they said, the people who invested in the company might lose their money.
It's like someone selling you a toy car for $10, saying it's worth that much, but then you find out it's only really worth $3 on the market.
Many smaller investors, like regular people saving up, could get hurt the most.
Some people have already lost a lot of money this way.
Executives are using 'in-kind contributions' where sponsors provide their own crypto to fund digital-asset treasury (DAT) deals.
This structure allows sponsors to set the value of often unlisted or hard-to-value tokens, shifting pricing and trading risks to shareholders.
Many DATs that once traded above their holdings' value now trade below, making it difficult for investors to assess worth and exit points.
Recent examples like Tharimmune, Alt5 Sigma, and Flora Growth show significant portions of funding coming from in-kind contributions of tokens that later fell in value.
Retail investors are seen as particularly vulnerable, potentially absorbing losses as market sentiment shifts and illiquidity is tested.
- Who
- Executives and sponsors of Digital Asset Treasury (DAT) vehicles, and public investors (many retail)
- What
- A shift in how crypto accumulation vehicles are funded, with a rise in 'in-kind' contributions of tokens instead of cash, leading to increased risk for retail investors.
- When
- Recent period, with the structure surging in 2025 and discussions referencing October market selloffs and November token listings.
- Where
- Primarily in the digital asset and public company markets.
- Why
- To attract investment in crypto accumulation vehicles as investor appetite wanes, allowing sponsors to sidestep certain risks and facilitate price discovery.
Sponsors of Digital Asset Treasuries
Public Investors (Many Retail)
Valuation of Digital Assets
Sponsors of Digital Asset Treasuries
Contribute their own crypto, often unlisted and hard to value, setting the initial price.
Public Investors (Many Retail)
Face difficulty in assessing the true worth of these assets and the investment.
Risk Allocation in Trades
Sponsors of Digital Asset Treasuries
Use in-kind contributions to lock in valuations and seed market demand, potentially sidestepping personal losses.
Public Investors (Many Retail)
Absorb the difference when tokens list below the deal price and bear the brunt of market selloffs and illiquidity.
Purpose of DATs
Sponsors of Digital Asset Treasuries
See DATs as a way to give investors new on-ramps into crypto and provide liquidity for themselves.
Public Investors (Many Retail)
May find themselves in a vulnerable position if the underlying illiquidity of assets is tested.
- New Funding Structure
- In-kind contributions to Digital Asset Treasury (DAT) deals.
- DAT Function
- Public companies holding concentrated crypto positions, reinvented from firms like biotech and mining.
- Risk Shift
- Pricing and trading risks increasingly fall on shareholders, especially retail investors.
- Example 1: Tharimmune Inc.
- $545 million private placement for Canton Coins; ~80% in unlisted Canton tokens priced at 20 cents, now ~11 cents.
- Example 2: Alt5 Sigma Corp.
- $1.5 billion raised for World Liberty Financial tokens; half in WLFI tokens priced at 20 cents, unlisted at the time.
- Example 3: Flora Growth Corp.
- $401 million deal to acquire Zero Gravity tokens; $35 million cash + $366 million in 0G tokens priced at $3, now ~$1.20.
- Estimated Retail Losses
- $17 billion on stocks modeled on Michael Saylor's Strategy Inc.