The wave of crypto companies going public between mid-2025 and the first half of 2026 has provided the market with a sufficient empirical dataset to evaluate a thesis that until recently remained speculative:Â can digital asset companies sustain public valuation when disconnected from the bullish crypto market cycle?
The evidence available as of July 2026 suggests that the answer is, at best, mixed. Of the six major crypto firms that completed IPOs from mid-2025 onward, all are trading below their opening-day prices. Gemini (GEMI) has fallen approximately 89% since its September 2025 debut. BitGo (BTGO) trades nearly 77% below its initial January 2026 trading price. Bullish (BLSH) has declined about 71% since its $90 opening. Even Circle (CRCL), the USDC issuer that debuted strongly in June 2025, has dropped approximately 75.3% from its $263.45 high. Coinbase (COIN), which has traded since 2021, is down 69% from its all-time high.
These figures are not merely technical corrections. They represent a structural disconnect between the institutional adoption narrative and the reality of public market valuation.
Correlation as a Curse
The pattern emerging from the data is unequivocal:Â crypto company stocks amplify the volatility of the underlying market rather than diversifying it. Coinbase, which many investors considered a “safer” vehicle for exposure to the crypto ecosystem, has proven to be a beta multiplier. When Bitcoin reached its cycle peak in October 2025, COIN hit its $420 high. With Bitcoin now experiencing an approximate 54% drawdown from that peak, COIN has lost two-thirds of its value.
Coinbase’s Q1 2026 earnings report revealed a net loss of $394 million, compared to a $66 million profit in the same period last year. Total revenue fell 31% year-over-year to $1.41 billion, missing Wall Street expectations of $1.52 billion. The GAAP loss per share was $1.49, against expectations of a $0.27 profit.
Coinbase’s management has indicated that the reported losses include $482 million in unrealized losses from cryptoasset holdings on its balance sheet. This is a critical point:Â publicly listed crypto companies are subject to mark-to-market accounting requirements that introduce significant accounting volatility, independent of the underlying operational health of the business.
The Fallacy of the “Bitcoin Treasury”
The case of Strategy offers a particularly instructive illustration of the risks of structural leverage. The company, which accumulated 843,706 BTC at an average cost of approximately $74,476 per token, faces an unrealized loss of roughly $10.8 billion. Its stock has fallen 77% from its all-time high.
Last week, Strategy sold $216 million worth of Bitcoin (3,588 BTC) to fund dividends on preferred shares. This transaction, the first Bitcoin sale in the company’s history, violated the “buy and never sell” principle that Michael Saylor had defended for years. The stock fell approximately 6% following the announcement.
The Bitcoin treasury model rests on a simple premise: leverage amplifies gains in bull markets. What the market is discovering now is that the same leverage amplifies losses in bear markets. When the average acquisition price exceeds the market price by 17%, as it currently does, the company’s capital structure becomes an implicit liability. Analysts do not project profitability for Strategy in 2026.
Models That Resist: Exchanges and Stablecoin Issuers
Not all categories of crypto firms face the same level of scrutiny. Exchanges and stablecoin issuers have demonstrated greater relative resilience, though not immunity.
Circle, despite its 72% drop from highs, trades approximately 110% above its initial offering price of $31. This premium reflects market recognition that the stablecoin issuance business generates recurring revenue through float economics—interest earned on Treasury bond reserves—which is less sensitive to the speculative cycle than transaction-based revenue. USDC has a market capitalization of approximately $76 billion, representing roughly one-quarter of the $320 billion total stablecoin market.
Coinbase, meanwhile, has begun diversifying its revenue streams. Stablecoin revenue reached $305 million in Q1 2026, up from $274 million the previous year. Derivatives trading volume increased 169% year-over-year. Coinbase’s global market share of crypto trading volume reached an all-time high of 8.6%. Its prediction markets segment, launched in January, was already generating an annualized revenue run rate of $100 million by March.
These data suggest that exchanges capable of diversifying beyond spot trading—into custody, staking, derivatives, payments, and stablecoin infrastructure—can build more defensible business models. Coinbase’s management has explicitly stated its goal of reducing dependence on crypto trading volatility.
The IPO-as-adoption-catalyst thesis rests on a seemingly solid argument: pension funds, banks, and asset managers cannot hold cryptoassets directly, but they can purchase shares of publicly listed crypto companies. In theory, this broadens the investor base and stabilizes valuation.
In practice, the reality is more complex. Institutions do not buy shares without restrictions; they buy shares that comply with their investment policies, which in turn depend on credit ratings and risk-stability profiles. As Anton Efimenko of 8Blocks noted, an institution prefers to invest in Treasury bonds at 3% annual yield over a staking product at 5.5% because the former offers vastly superior risk clarity.
Cathie Wood’s ARK Invest purchased $77 million worth of crypto stocks in June 2026, but this figure is marginal within the context of the firm’s assets under management. Institutional demand for crypto stocks, while growing, remains selective and cycle-sensitive.
There is a feedback mechanism that crypto company managers must understand:Â when the stock price falls, the company’s ability to issue equity and finance growth contracts, which in turn can affect business development and, eventually, ecosystem adoption.
Companies that planned IPOs in 2026 are reassessing their timelines. Kraken paused its listing in March. Grayscale has delayed its preparations. Consensys and Ledger have also postponed their plans. The market weakness has effectively frozen the IPO pipeline.
The 2025 IPOs raised an estimated $14.6 billion across at least 11 offerings. The interruption of this capital flow reduces companies’ capacity to invest in expansion, acquisitions, and infrastructure, at a time when competition for market share remains intense.
The empirical evidence accumulated since mid-2025 suggests that crypto companies going public do not escape the digital asset market cycle; they incorporate it into their capital structure with an additional leverage effect. The correlation between Bitcoin’s price and the stocks of Coinbase, Circle, and other listed firms remains extremely tight.
This does not mean the public market is irrelevant to the sector. It means that the “institutional maturity” narrative must be reassessed: access to public markets is not an end in itself, but a means that carries obligations of transparency, revenue discipline, and governance scrutiny that many crypto firms are not prepared to meet across all phases of the cycle.
