Key Takeaways
- DWF Labs co-founder warned that Strategy and BitMine, holding a combined $23.1B in unrealized losses, could trigger a historic crypto crash.
- Strategy holds 843,700 BTC, and BitMine holds 5.42M ETH, both heavily underwater but still accumulating.
- Mining executive Jiang Zhuoer countered that Strategy’s leverage remains manageable even at $30K BTC, reducing forced liquidation risk.
Andrei Grachev has said out loud what many in institutional crypto have been thinking privately. The co-founder of DWF Labs posted on X this week, asking investors a pointed question: if Bitcoin crashed to $10,000-$20,000, what would your strategy be?
His framing was not a prediction. It was something arguably more unsettling, a genuine warning from a figure embedded in the infrastructure of crypto market-making that the conditions for such an event are now in place.
“BitMine and Strategy have all the chances to create the largest market crash in the history of crypto,” Grachev wrote, adding that he hopes it does not happen.
What Triggered the Warning?
The losses sitting on both balance sheets give Grachev’s concern its weight. Strategy holds 843,700 BTC at an average cost of $75,700, carrying an unrealized loss of approximately $12.27 billion. BitMine holds 5.42 million ETH at an average cost of $3,500, sitting on an unrealized loss of approximately $10.35 billion. Combined, the two largest corporate crypto treasuries are underwater by $23.1 billion.
BitMine has amassed more than 5.4 million ETH, roughly 4.5% of Ethereum’s entire circulating supply, in approximately one year under the leadership of chairman Tom Lee.
That concentration is precisely what makes the position systemically significant. A forced seller of that scale in a thin market does not just take a loss. It moves the price for everyone else.
BitMine’s shares have dropped 28% since early May 2026, falling below February lows to their weakest level since the company announced its Ethereum treasury pivot in 2025.
Under FASB fair value accounting rules, these unrealized swings flow directly to GAAP earnings each quarter, producing multi-billion-dollar reported losses even though no assets have been sold. Both companies maintain they have no plans to sell.
‘Leverage Is Still Manageable,’ Says Jiang Zhuoer
Not everyone agrees that the cliff edge is as close as Grachev implies. Jiang Zhuoer, CEO of Chinese mining giant BTCTOP, pushed back directly on the forced-selling narrative.
Zhuoer argued that Strategy has little incentive to break its core market identity of never selling Bitcoin, and that even at $30,000, its leverage ratio would only rise from around 5% to approximately 10%, well within manageable bounds.
Zhuoer also laid out a financial logic for why Strategy’s STRC preferred dividend obligations do not necessarily require panic selling. Selling early low-cost Bitcoin generates accounting gains that can service STRC interest, while fresh STRC issuance proceeds fund continued Bitcoin purchases, preserving the net-buying narrative that the market is paying a premium to believe in. It is a financial treadmill, but one Zhuoer argues can keep moving at current prices.
Where the Disagreement Lands
The differing views from Grachev and Zhuoer reflect a broader debate over whether corporate crypto treasuries pose a systemic market risk or simply represent long-term conviction investing. Both firms continue to accumulate despite deep unrealized losses, a dynamic that either signals strong institutional conviction or increases the risk of a forced unwind, depending on how it is interpreted.
The only major digital asset treasury currently in positive territory is Hyperliquid Strategies, sitting on roughly $1.2 billion in unrealized gains, a data point that suggests treasury composition and entry timing matter considerably more than holding crypto itself.
Grachev’s warning is not that a crash is inevitable. It is that the concentration is large enough, and the market is thin enough, that if either company were forced to sell at scale, the feedback loop would be unlike anything the industry has seen.
Whether that remains a thought experiment or becomes a market event depends on where Bitcoin and Ethereum trade from here.
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Dr. Guneet Kaur is a senior editor at CCN.com and a Science Fellow at Exponential Science. She is a fintech and blockchain expert with extensive experience in digital finance education, blockchain ecosystems, and cryptocurrency markets. She has worked with global media such as Cointelegraph, as well as education and blockchain platforms, to design and lead strategic content and learning initiatives. As an educator and assessor for top-tier executive programs, she bridges real-world fintech trends with academic insight.
Dr. Kaur is also a published researcher and peer reviewer across fintech and data science journals, including Financial Innovation Journal and International Journal of Big Data Intelligence and Applications. Her work spans data-driven analysis, Web3 innovation, and technical content development. With a strong foundation in both industry and academia, she translates complex financial technologies into practical applications, empowering learners, professionals, and institutions across the rapidly evolving digital finance landscape.
