Market Downturn Hits Public Pension Funds

Several U.S. public pension funds are now dealing with steep losses after investing heavily in Strategy, the Bitcoin-focused company led by Michael Saylor.

As Bitcoin prices continue to slide, the value of these investments has shrunk by roughly $337 million. Data shows that 10 out of 11 pension funds tied to Strategy have recorded losses of around 60%, highlighting how deeply the ongoing crypto downturn is cutting into institutional portfolios.

The pain intensified as Strategy’s stock price plunged by 67%, mirroring the broader sell-off in digital assets. What once looked like a bold treasury strategy tied to Bitcoin’s growth has become a case study in volatility risk. Pension managers now face scrutiny from stakeholders who are increasingly concerned about exposure to crypto-linked equities during periods of market stress.

Bitcoin price meltdown leaves these public pensions down 60% on Strategy bets

Bitcoin And Ethereum Losses Deepen Corporate Treasury Pressure

The downturn extends far beyond public pensions. Major crypto treasury firms are also grappling with enormous unrealized losses as Bitcoin and Ethereum prices weaken. Strategy and Tom Lee-led Bitmine together face more than $12 billion in combined unrealized losses, reflecting the severity of the market contraction.

These losses stem largely from aggressive accumulation strategies during bullish periods. Companies that once benefited from rising crypto prices now find themselves managing balance sheets that fluctuate sharply with market sentiment. As crypto values continue to fall, corporate treasuries are forced to reassess risk tolerance and long-term investment approaches.

Strategy and Bitmine Face Over $12B in Combined Unrealized Bitcoin and Ethereum Losses.

Market Weakness And Policy Uncertainty Drive Sell-Off

The recent slump did not happen in isolation. Global market weakness and ongoing policy uncertainty have fueled heavy selling across technology stocks in both Asia and the United States. As investors rotated away from risk assets, Bitcoin dropped to its lowest level since November 2024, triggering a chain reaction across the digital asset market.

Institutional traders responded by reducing exposure to volatile assets, accelerating downward momentum. Crypto markets often mirror macroeconomic pressures, and the combination of rising uncertainty and declining tech sector confidence amplified selling pressure. This environment intensified losses not only for retail investors but also for major corporate holders and pension funds with crypto-linked strategies.

Major Crypto Treasury Holdings Underwater

Strategy remains the largest corporate holder of Bitcoin, having started its accumulation strategy in August 2020. The firm now holds approximately 713,502 BTC acquired at a total cost of $54.26 billion. However, with Bitcoin trading near $69,200 at press time, the company’s holdings are valued at about $49.37 billion, leaving an unrealized loss of roughly $4.89 billion.

Bitmine faces a similar situation on the Ethereum side. As the world’s largest corporate holder of ETH, the company holds around 4.28 million ETH purchased for about $16.5 billion. With Ethereum trading close to $2,050, Bitmine’s holdings are now worth about $8.79 billion, translating to an unrealized loss of approximately $7.71 billion. These numbers underscore how rapidly market downturns can erode billions in corporate asset value.

Earlier today, Bitcoin fell below $70,000 for the first time since November 2024, while Ethereum dropped below $2,100. The price collapse deepened unrealized losses across crypto-focused balance sheets, forcing companies to confront mounting financial pressure.

Crypto Market Cap Collapse Signals Harsh Bear Market

The broader market picture paints an even more dramatic story. On October 6, crypto markets reached a record-high market cap of $4.3 trillion. Within just four months, the total market value plunged to about $2.3 trillion, wiping out roughly $2 trillion. That represents a staggering decline of nearly 46% of the entire crypto market’s value.

Such a rapid collapse caught many investors off guard. Analysts often warn that bear markets arrive when optimism peaks, and the sudden drop serves as a reminder of crypto’s extreme volatility. The contraction has triggered forced liquidations, panic selling, and a re-evaluation of risk models across both institutional and retail sectors.

Institutional Confidence Faces A Major Test

The current downturn places institutional confidence in crypto under intense scrutiny. Pension funds, corporate treasuries, and hedge funds that entered the market during bullish periods now face pressure to justify their strategies. Losses of this magnitude raise questions about governance, diversification, and risk management practices within institutions responsible for long-term financial stability.

At the same time, some analysts argue that institutional participation remains a long-term positive for the industry despite short-term losses. They point to previous cycles where sharp corrections eventually paved the way for stronger infrastructure and more mature investment strategies. Others, however, caution that repeated large-scale losses could slow institutional adoption if stakeholders become increasingly risk-averse.

For now, the numbers speak loudly. Public pensions are down tens of millions, corporate treasuries are absorbing billions in unrealized losses, and the broader crypto market has shed nearly half its value in just a few months. As Bitcoin and Ethereum struggle to regain momentum, investors and institutions alike are watching closely to see whether the current downturn represents a temporary correction—or a deeper, prolonged bear market that reshapes the landscape of digital asset investment.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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