Coin-stock linkage failure: Why do related stocks fall when Crypto Assets rise?

Author: Zhou, ChainCatcher

Original Title: From Misalignment to Co-Drop: The Coin-Stock Link Reaches a Crossroads

In the past month (August 1 - 31), there has been a clear differentiation within the cryptocurrency market. Bitcoin (BTC) rose and then fell back, ending the month down 6.15%; Ethereum (ETH) continued its strong performance, rising 19.84%; Solana (SOL) and BNB increased by 17.85% and 9.79%, respectively. Overall, a structural market trend has emerged, and by the end of the month, sentiment has become cautious.

In comparison, the related stocks in the secondary market are under more concentrated pressure. MicroStrategy (MSTR), which is centered around Bitcoin holdings, fell 16.78% in August, clearly underperforming BTC itself; Ether treasury and concept stocks generally experienced a deep correction.

Why the on-chain pulse cannot drive the valuation elasticity of stocks - this is pushing the "coin-stock linkage" towards a crossroads that needs recalibration.

August Image: From Dislocation to Same Decline, Stock Side More Fragile

August is not a one-sided bull market. After a surge, BTC fell back and ended the month down; although ETH, SOL, and BNB still showed monthly gains, they all followed a "rise first, then fall back" pattern — overall, it looks more like a gradual rise followed by a cooling off.

The reaction on the stock side is more sensitive. In simple terms, two things are at play: first, the valuation premium is shrinking (the "price difference" between stock prices and the net value of holding coins is getting smaller, even turning into a discount), and second, financing expectations are warming up (the market is worried about continued issuance and convertible bonds). The same on-chain fluctuations will be amplified when transmitted to stock prices, resulting in deeper pullbacks.

The attitude of institutions has also turned cold, further compressing the "imagination" of valuations. According to Barron’s report, analysts Gus Galá from Monness, Crespi, Hardt downgraded MSTR from Neutral to Sell in April, and maintained Sell with a target price of $175 on August 21, citing the high volatility and cyclicality of Bitcoin, the balance sheet fragility caused by the company's high leverage in purchasing currency, and the potential decline in the premium relative to a net asset value of about 1.34 times. For many institutions, it is better to hold spot assets or invest through compliant funds rather than bear the uncertainties of corporate governance and dilution, causing crypto stocks to naturally lose premium space in such comparisons.

Crossroads: Fix the linkage, or turn off early?

What determines the direction is not the price itself, but whether the transmission efficiency can be restored. In the past month, the three links of treasury, financing, and operations have almost simultaneously encountered friction.

First, let's look at the financial reservoir transmission. Taking SharpLink (SBET) as an example, it has continuously updated its Ethereum holdings over the past month, while also enabling market issuance (ATM) to supplement and releasing the signal that "if the stock price is below net value, a buyback will be considered." By the end of August, it ranked as the second largest Ethereum financial reservoir company. However, its stock price did not rise in sync with ETH, and in August, it even experienced an overall decline, with its total market value falling below the value of its ETH holdings. The market cares more about "how much" rather than "how to hold and how to govern." Simply increasing the balance has become difficult to exchange for valuation premiums.

Secondly, the financing transmission is backfiring on stock prices. The narrative that once relied on the model of "issuing shares to buy coins" to connect market value with coin prices is collapsing. Take ETH Z as an example; although the company disclosed that it holds over $349 million in ETH reserves, the large-scale stock issuance plan has triggered market concerns about dilution, causing the stock price to plummet. This validates the idea that "financing is not a means to boost stock prices, but has become the source of suppression."

Finally, there is operational transmission. The profitability of mining institutions is under pressure, and exchanges are experiencing weak growth, which weakens the correlation between stock prices and cryptocurrency prices. According to Coinbase's Q2 financial report, its trading revenue was only about $764 million, a nearly 40% quarter-over-quarter decline; total revenue fell from $2.034 billion in the first quarter to $1.497 billion, a quarter-over-quarter decrease of 26.4%. This indicates that, despite the rise in BTC and ETH, the operational performance of exchanges has not improved synchronously, making it difficult to attract an increase in stock prices.

The result of all this accumulation: the flavor of the late cycle has emerged. The short to medium-term momentum of the cryptocurrency prices has begun to "pull a bit, rest a bit," and the sharpness is dulling; the stock side is more fragile—premium retreating, financing fatigue, and operational flexibility not keeping up, often gasping before cryptocurrencies, transforming early burnout from phenomenon to consensus.

Fix or Decouple: Looking at Three Small Matters

From this inference, even if these companies continue to purchase BTC/ETH at this moment, the marginal returns are more likely to quickly approach the "net value" rather than the past scenario where there was an additional layer of premium above the "net value." This is also the core of the crossroads: whether to rely on mechanisms to fix the transmission or to accept a longer period of structural decoupling?

To determine the direction, you don't need to bet on grand narratives, just focus on these three small things:

1. Observe the mNAV discount: whether it can converge within 3-4 weeks, or even return to the premium range.

2. Observe financing actions: Whether to shift from high-frequency ATMs / convertible bonds to a more restrained pace, supplemented by buybacks / lock-ins, to anchor the net asset value per share.

3. Monitor business indicators: On-chain transaction fees/transaction recovery, marginal decrease in cash costs for mining companies, increase in the proportion of non-trading income such as derivatives/custody from exchanges.

If two out of the three items are met, there will be a sequel to the linked story; otherwise, the "decoupling" will be pinned down, and the elastic punishment suffered by the cryptocurrencies and stocks during the pullback period will be heavier.

Conclusion

Overall, the wave of "gradual cooling" in late August is not a coincidence, but a public stress test. Going forward, investors face the choice of whether to continue betting on those companies that can translate "stories" into "mechanisms," or to bypass them and return to native assets and more transparent allocation tools. For the industry, this is more of a model reassessment: are crypto stocks a bridge to mainstream capital, or the first illusion to fizzle out in the next market cycle? The crossroads are in sight, and time will not be infinitely forgiving.