Digital asset treasury companies are taking a hit following Bitcoin's price drop in October. Strategy (MSTR) stock has fallen roughly 40% since the liquidation event, but smaller firms following their playbook are down even more. American Bitcoin (ABTC) and ProCap (BRR) dropped over 60% in the last month. Data shows that 65 out of 100 of these companies bought their Bitcoin at prices higher than where it is now, leaving them with unrealized losses. There are concerns about valuations compressing, with MSTR trading close to the raw value of its Bitcoin holdings. In response, MSTR set up a $1.44 billion cash reserve to protect dividends and debt payments, while the CEO argues they are an operating company rather than a passive ETF. Analysts suggest the sector is entering a tough phase where smaller players might disappear or get acquired. Even new listings are struggling, with Twenty One Capital (XXI) dropping 19% on its recent debut.