Crypto's Sell-Off Hits Balance Sheets Hard as Bitcoin and Ether Plummet
By John Nada·Feb 6, 2026·3 min read
The latest crypto sell-off is shaking balance sheets as Ether and Bitcoin prices tumble. Companies face significant losses, revealing vulnerabilities in the market.
Crypto's latest sell-off is more than just a price dip; it’s shaking balance sheets and affecting investors across the board. Ether's slide has left treasury-heavy companies grappling with significant paper losses, while Bitcoin ETFs introduce a wave of investors to downside volatility. The impact of extreme weather also reminds miners of their reliance on power grids, as former crypto mining infrastructure pivots to support AI demands.
BitMine Immersion Technologies, chaired by Tom Lee, is facing a grim reality with its Ether-heavy treasury. As Ether fell below $2,200, the company’s unrealized losses surged past $7 billion, revealing the inherent risks of a balance sheet dependent on volatile digital assets. With roughly $9.1 billion worth of Ether in its coffers, including a recent acquisition of 40,302 ETH, BitMine stands highly exposed to further price fluctuations. Lee has defended the company's strategy, asserting that unrealized losses are a natural aspect of holding ETH, especially during downturns.
Meanwhile, BlackRock's iShares Bitcoin Trust (IBIT) investors are feeling the pinch as Bitcoin's price dipped below $80,000, pushing aggregate returns into negative territory. Bob Elliott, chief investment officer at Unlimited Funds, noted that the average dollar invested in IBIT is now underwater. Once celebrated as one of BlackRock's most successful ETF launches, IBIT has now become a firsthand lesson in Bitcoin's volatility, especially during sharp price declines.
The situation worsened for Bitcoin miners as a powerful winter storm swept across the US in late January, forcing them to significantly reduce production. Daily output from public miners, which typically averaged 70 to 90 BTC, plummeted to just 30 to 40 BTC at the storm's peak. This sharp decline highlights the ongoing sensitivity of mining operations to weather conditions and energy grid stress. However, as conditions improved, production rebounded, showcasing miners' adaptability but also the volatility tied to energy-dependent operations.
In a fascinating twist, CoreWeave demonstrates how the infrastructure developed during the crypto boom is now serving the AI sector. Transitioning from a crypto mining operation to AI infrastructure provider, CoreWeave exemplifies the migration of computing resources across technology cycles. With Nvidia's recent $2 billion equity investment, the former mining hardware is now a critical component of AI's data center backbone, illustrating a significant shift in the industry.
The current challenges in the crypto market reveal deeper vulnerabilities in balance sheets tied to digital assets. As Ether and Bitcoin face continued pressure, the implications for investors and companies alike are profound. Understanding these dynamics is essential for navigating the evolving landscape of crypto and its intersection with emerging technologies.