Crypto-Linked Stocks Plummet 85% in Treasury Downturn

Tron Inc., a Nasdaq-listed toy and souvenir manufacturer that operates as a TRX treasury company, has seen its stock collapse 85% from its June 20 peak of $12.80 according to TradingView data. The company, which went public on July 24 through a reverse merger with SRM Entertainment, experienced a particularly brutal September with a 55% decline alone. This dramatic downturn reflects a broader pattern affecting crypto-linked public companies, with MicroStrategy (MSTR) down roughly 30% and Bitmine Immersion Technologies Inc. shedding 67% over the same three-month period.

Peter Chung, head of research at Presto Research, told Decrypt that “the hype is deflating” across the sector. Chung explained the market dynamics: “It is common for hype and frenzy to take over when a new meta is introduced, leading to outsized gains. As cooler heads prevail, the asset tends to find a stable footing, leading to a decline in its valuation.” He noted that this pattern occurred earlier this year with the Circle IPO and is now repeating with digital asset treasury companies (DATs).

The sell-off represents a digital asset treasury trend rather than isolated company failures. Czhang Lin, head of LBank Labs, emphasized that “It’s not just Tron. Many firms in the space are navigating similar headwinds.” Stephen Gregory, founder of crypto trading platform Vtrader, identified specific causes behind the downturn, pointing to “bad execution” and companies “rushing to the market” without “fully fleshing out” their strategies.

Regulatory pressures are compounding the sector’s challenges. Gregory noted that investigations by the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority involving 200 firms for suspicious stock trades preceding crypto treasury announcements are contributing to the stock price declines. These regulatory actions have created additional uncertainty for investors in crypto-linked public companies.

Justin Sun, who serves as an adviser to Tron Inc. and is the founder of TRON, continues to be a controversial figure in the crypto space. His history includes early ICO days in China and recent run-ins with U.S. law enforcement for allegedly selling unregistered securities related to TRON and BitTorrent. Sun’s recent involvement with the Trump-family-linked World Liberty Financial project has created immediate market impacts.

After WLFI’s token generation event on September 1, Sun claimed 600 million tokens and moved 9 million to the HTX exchange, which he described as “routine tests and address splits” without any intention to sell. This move prompted the WLFI project to freeze Sun’s remaining 591 million unlocked tokens, highlighting the ongoing regulatory and trust challenges facing prominent figures in the crypto industry. Meanwhile, TRX itself has declined nearly 1% in the past 24 hours, currently trading at $0.33 with a market capitalization of $31.56 billion, maintaining its position as the tenth-largest cryptocurrency.