Shares in Michael Saylor-led Strategy, the world’s biggest corporate bitcoin holder, have tumbled 50 per cent over the past three months, dragging down scores of copycat companies.

About $77bn has been wiped from the stock market value of these companies, which raise debt and equity to fund purchases of crypto, since their peak of $176bn in July, according to industry data publication The Block.

With Saylor’s company now worth less than the bitcoin it holds, investors worry that a business model that relied on a virtuous circle of rising crypto prices and massive share and debt issuance is now unravelling.

“There’s going to be a fire sale at these companies; it’s going to get worse,” said Adam Morgan McCarthy, senior research analyst at crypto data firm Kaiko. “It’s a vicious cycle. As soon as the prices start tanking, it’s a race to the bottom.” Line chart of $ showing Strategy's falling share price

Saylor’s software business inspired a raft of copycats in industries including film production, vaping and electric vehicles, after its pivot to a “bitcoin treasury” strategy drove a huge increase in its share price. Purchases by such companies have been a big driver of bitcoin hitting a record high last month.

But the craze has soured as cryptocurrencies bore the brunt of a sell-off in speculative assets this autumn, in a sharp reversal for a sector that had been buoyed by President Donald Trump’s pledge last year to turn the US into a “bitcoin superpower”.

Shares in Japan’s biggest bitcoin holder Metaplanet have plunged 80 per cent since their June peak. The company on Tuesday raised a $130mn loan backed by its bitcoin, which it said would be used for purposes including buying back stock. The Smarter Web Company, the UK’s biggest bitcoin buyer, has experienced a 44 per cent stock price drop this year. It is valued at £132mn while the bitcoin it holds is worth about $232mn.

“It was inevitable,” said Jake Ostrovskis, head of OTC trading at Wintermute, referring to the sell-off in digital asset treasury stocks. “It got to the point where there’s too many of them.”

Several companies have begun selling their crypto stockpiles in an effort to fund share buybacks and shore up their stock prices, in effect putting the crypto treasury model into reverse.

North Carolina-based ether holder FG Nexus sold about $41.5mn of its tokens recently to fund its share buyback programme. Its market cap is $104mn while the crypto it holds is worth $116mn. Florida-based life sciences company turned ether buyer ETHZilla recently sold about $40mn worth of its tokens, also to fund its share buyback programme.

Sequans Communications, a French semiconductor company, sold about $100mn of its bitcoin this month in order to service its debt, in a sign of how some companies that borrowed to fund crypto purchases are now struggling. Sequans’ market capitalisation is $87mn while the bitcoin it holds is worth $198mn.

Georges Karam, chief executive of Sequans, said the sale was a “tactical decision aimed at unlocking shareholder value given current market conditions”.

While bitcoin and ether sellers can find buyers, companies with more niche tokens will find it more difficult to raise money from their holdings, according to Morgan McCarthy. “When you’ve got a medical device company buying some long-tail asset in crypto, a niche in a niche market, it is not going to end well,” he said, adding that 95 per cent of digital asset treasuries “will go to zero”.

Strategy, meanwhile, has doubled down and bought even more bitcoin as the price of the token has fallen to $87,000, from $115,000 a month ago. The firm also faces the looming possibility of being cut from some major equity indices, which could heap even more selling pressure on the stock.

But Saylor has brushed off any concerns. “Volatility is Satoshi’s gift to the faithful,” he said this week, referring to the pseudonymous creator of bitcoin.

European Parliament legislators voted 457-148, with 33 abstentions, to approve a 1.5-billion euro ($1.7 billion) program, with 300 million euros ($345 million) slated for the Ukraine Support Instrument. Raphaël Glucksmann, an EU lawmaker from France’s S&D party, said that the defense program “will enable us to build a more resilient and sovereign Europe” through partnering with Ukraine to build a cutting-edge military industrial complex. “This is key to making sure we can protect our democracies effectively and autonomously,” he said. Ukraine’s defense industry “needs us,” EU Defense Commissioner Andrius Kubilius told EU lawmakers before the vote in Strasbourg, France, without mentioning the ongoing peace negotiations to end the war. “But we need Ukraine’s defense innovations even more.”

He said that allowing Ukrainian access to the EU’s Defence Investment Program “makes it possible to procure defense equipment in, with and for Ukraine.” EU defense spending is expected to total around 392 billion euros (more than $450 billion) this year, almost double the amount of four years ago, before Russia launched its full-scale invasion of Ukraine on Feb. 24, 2022. The Trump administration has signaled that it’s prioritizing U.S. security on its own domestic borders and in Asia. It has told Europeans that they must fend for themselves and Ukraine in the future.

Born out of the carnage of the two world wars, the EU started as a trading bloc designed to avert conflict. But Russia’s war in Ukraine has spurred a shift in the Brussels-based bloc, heightening its defense and security posture. The European Commission, the EU’s executive branch, believes that about 3.4 trillion euros ($4 trillion) will probably be spent on defense over the next decade. To help, it intends to propose boosting the EU’s long-term budget for defense and space to 131 billion euros ($153 billion).

“We shall be powerful geopolitically if we shall be strong in our defense, and we shall be strong in defense if we shall be strong in our defense industry, and if we shall be strong in our defense industry, we shall be industrially independent, autonomous and much less fragmented,” Kubilius said.

uh, Europeans are getting Mao-pilled?

also very funny to talk about being "powerful geopolitically" when you're a vassal state that barely even has geopolitics of its own - all this power, just to be wielded by your master's hands?

EU member countries are being urged to buy much of their military equipment within the bloc, working mostly with European suppliers — in some cases with EU help to cut prices and speed up orders. Under the road map, EU nations should only purchase equipment from abroad when costs, performance or supply delays make it preferable. Kubilius said that EU-based defense companies can apply for tax breaks and other financial incentives to fund so-called European defense projects of common interest that “no member state can ever build alone, but that will protect the whole of Europe,” like Eastern Flank Watch, Drone Defense Initiative or Space Shield. Permitting Ukrainian companies to participate in these projects “allows us to inject Ukrainian military innovation in the European defense industry,” he said.

Last week, the European Commission rolled out a new defense package to allow tanks and troops to deploy more rapidly across Europe as well as the EU Defense Industry Transformation Roadmap, which aims to simplify and unify regulations on the EU’s defense industry, and corral investment into domestic production of weapons, vehicles, satellites, shells and bullets. Before the vote, Kubilius said that the defense program is meant to make sure big nations cannot seize territories of weaker nations. “My country Lithuania was really a victim of such previous policies prevailing in the European continent,” he said, referring to the Soviet occupation of Lithuania for 50 years. “That is why I am for a strong Europe and a strong European defense industry.”

The Navy was attempting to launch and recover more than 30 drone boats from a combat ship off the coast of California in May when more than a dozen of the uncrewed vessels failed to carry out their missions. The boats had rejected their inputs and automatically idled as a fail-safe, making them “dead” in the water. The botched experiment quickly became a potential hazard to other vessels in the exercise. Military personnel scrambled overnight to clean up the mess, towing the boats to shore until 9 a.m. the next day. The drone boats were relying on autonomy software called Lattice, made by California-based Anduril Industries. The Navy said the exercise was handled safely, but the incident alarmed Navy personnel, who said in a routine follow-up report that company representatives had misguided the military. In comments that were unusual for such a report, which was viewed by The Wall Street Journal, four sailors warned of “continuous operational security violations, safety violations, and contracting performer misguidances (Anduril Industries).” If the software configuration wasn’t immediately corrected and vetted, they wrote, there would be “extreme risk to force and potential for loss of life.”

Since its founding in 2017, Anduril Industries has become one of the hottest companies in a crowded field of defense-tech startups, promising to deliver hardware and software that will usher in a new era of autonomous warfare and equip the U.S. military with the speed that only a startup can offer. The privately held company was valued at more than $30 billion in its last funding round and has scored an impressive number of military contracts to build prototypes of everything from unmanned jet fighters to mixed-reality headsets to battlefield-management systems. The company’s founder, tech billionaire Palmer Luckey, has made his convictions clear. “We spend our own money building defense products that work, rather than asking taxpayers to foot the bill. The result is that we move much faster and at lower cost than most traditional [large defense companies],” Luckey said in a TED Talk published in April. “Unlike traditional contractors, we build, test and deploy our products in months, not years.”

move fast and break your own things!

The startup’s fast-moving approach comes with its share of setbacks—during closed military exercises, at private drone ranges and even on the battlefield in Ukraine. In California, a mechanical issue damaged the engine in Anduril’s unmanned jet fighter Fury in a ground test over the summer ahead of a critical first flight for the Air Force. In August, a test involving its Anvil counterdrone system caused a 22-acre fire in Oregon. And in the exercises with unmanned boats over the summer off the coast of California, Anduril’s Lattice software struggled to command and control vessels. Anduril’s only real battlefield experience—in Ukraine—has been marred by problems as well, including vulnerability to enemy jamming, according to former employees and others familiar with the systems in Ukraine. Some front-line soldiers of Ukraine’s SBU security service, for instance, found that their Altius loitering drones crashed and failed to hit their targets. The drones were so problematic that they stopped using them in 2024 and haven’t fielded them since, according to people familiar with the matter.

“The challenge will be, can they deliver? They have minimum viable products in a bunch of different areas,” said Bryan Clark, a former Navy strategist who is now at the Hudson Institute. After the Journal inquired about the incidents, the company said that its methods can lead to testing failures. “We recognize that our highly iterative model of technology development—moving fast, testing constantly, failing often, refining our work, and doing it all over again—can make the job of our critics easier,” the company said in a statement. “That is a risk we accept. We do fail … a lot.” Representatives from Anduril and those who defend the company say that it is encountering the same sorts of issues that occur in any weapons development program and that the company’s roster of engineers is making impressive strides. They say that none of the incidents suggest fundamental problems with its products and that the point of testing is to challenge the software, find the bugs and fix them. The company said it has maintained a “near continuous” presence in Ukraine to update its software and weapons, and that its drones have proven effective against a large number of Russian assets.

Software setbacks

Anduril’s software platform, called Lattice, aims to connect various weapons systems to enable a single servicemember to control a range of drones. On its website, the company says Lattice can orchestrate “machine-to-machine tasks at scales and speeds beyond human capacity.” The platform “lets us deploy millions of weapons without risking millions of lives. It also allows us to make updates to those weapons at the speed of code,” Luckey said in April. But in some Navy exercises, Lattice has fallen far short of servicemembers’ expectations, according to documents, defense officials and people familiar with the matter. In some cases, operators have had to manually send commands to boats or control them remotely with a device due to the software’s shortfalls, the people said. During the May exercise with drone boats in California, unmanned boats made by BlackSea Technologies were relying on Lattice when they began to idle in the water. The boats were rejecting commands and were unable to reliably maneuver away from other traffic, prompting a safety stand-down, according to people familiar with the exercise. Anduril said the failure wasn’t Lattice’s fault, but rather a bug in the software on the boats, made by BlackSea Technologies. Anduril said it identified the root cause, fixed the problem and returned to the exercise a few days later to successfully complete autonomous mission plans. BlackSea Technologies referred questions about the exercise to the Navy since its boat, the Global Autonomous Reconnaissance Craft, is an official Navy program. BlackSea also said that its boat is designed to work with a range of software and that it has successfully operated with a half-dozen other software stacks. A Navy spokesperson didn’t comment on the companies involved, but said the exercise had multiple mitigation measures in place and didn’t create risk to force or potential for loss of life. He said the boats went “dead in the water” as an automatic fail-safe, which prevented them from causing damage or injury. Three people familiar with the exercise said the problem was Anduril’s because it was the company’s responsibility to implement its software correctly. The authors of the preliminary report, who said Anduril had misguided the military, couldn’t be reached to comment.

...

Trial by fire

During an August drone intercept test in Oregon, Anduril’s Anvil counterdrone system crashed and caused a 22-acre fire near the Pendleton Airport, according to an incident report obtained by the Journal through a Freedom of Information Act request. The report said Anduril had tried to put out the flames with its own vehicle, but three trucks from the local fire department had to be brought in to extinguish the fire. Anduril said it has since developed a mitigation plan for impact and intercept testing at the range to mitigate or avoid any fires in the future. Photographs show a scorched and mangled drone, and satellite images reveal the extent of the damage to the terrain. Major defense companies that have been testing for decades typically understand their boundaries and have adequate mitigation measures on site, analysts say. “Anduril is less prepared institutionally to do this, so they are finding their way around,” said Jonathan Wong, a senior policy researcher at Rand, referring to the fire. The drone range declined to comment. Anduril said that the test was conducted in accordance with all range safety procedures. It said the fire was a possible known outcome and not a system failure. “We test five days a week nearly 52 weeks out of the year at several of our test sites across the US,” the company said. “We expect things like this to occur once in a while due to the volume of tests.”

United Kingdom has practically lost the ability to defend both its NATO allies and even its own territory. And this is the result of a failed defence policy that lasted for many years and, despite loud statements, continues to this day. An assessment of the problems within the British Armed Forces was published by the country's parliamentary Defence Committee. It notes that there is now a real risk that the UK may be unable to fulfil Article 3 of the NATO Treaty, which requires maintaining the capacity to resist armed attack. Although the British Armed Forces are still considered strong within the region, their position is extremely fragile due to years of underfunding, slow decision-making, and excessive dependence on the United States. The report also stresses that despite constant calls for a wake-up, everything continues to stall in place. The committee urged the government to stop burying its head in the sand and begin strengthening both conventional and nuclear military capabilities. It also highlighted the need to reform defence procurement and increase interoperability and standardisation.

Regarding relations with the United States, the committee recommends maintaining NATO's resilience while also identifying areas where replacements would be needed should the Americans step back. To close capability gaps, deeper cooperation with Europe especially France is advised. The report concludes that British society must become more engaged in defence matters, particularly regarding unfulfilled promises. The government, for its part, must define clear boundaries and scopes for defence projects, and perhaps even create a dedicated Ministry of Homeland Defence to enhance resilience. From Defense Express, we can add that this is an important attempt to draw attention to the UK's defence problems, where despite all assurances there are not enough tanks and self-propelled artillery to field even a full division. Some may argue this is due to aid for Ukraine, but replacements for systems like the AS-90 have already been chosen; they simply have not been contracted for over a year, for unclear reasons. There are also issues with long-delayed projects, ranging from the poorly modernised Challenger 3 to long-range weapons for the F-35, which have now been pushed into the 2030s. Therefore, the British should reconsider their approach to their armed forces and defence in general because soon it may be too late. Of course, creating a new ministry may not be the best idea, as it could only increase bureaucracy and complicate processes. However, the rest of the committees proposals are important general steps needed to begin resolving this crisis.

President Trump spoke by phone last week with Nicolás Maduro, the Venezuelan leader, and discussed a possible meeting between them, multiple people with knowledge of the matter said, even as the United States continues to threaten military action against Venezuela.

The conversation took place late in the week, two of the people said. It included a discussion about a possible meeting between the two men in the United States, according to the people with knowledge of the matter, who were granted anonymity because they were not authorized to discuss the matter publicly. There are no plans at the moment for such a meeting, one of the people said.

The phone call, which included Secretary of State Marco Rubio, came days before a State Department designation of Mr. Maduro as the leader of what the administration considers a foreign terrorist organization, the Cartel de los Soles, came into effect.

The United States has built up a substantial military presence in the Caribbean aimed at Venezuela. Administration officials have said their goal is to deter drug smuggling, but have also made clear that they want to see Mr. Maduro removed from power, possibly by force.

The New York Times reported in October that Mr. Maduro had offered the United States a significant stake in the country’s oil fields, along with a host of other opportunities for American companies, in an effort to defuse tensions. But Mr. Maduro sought to remain in power, and the U.S. officials cut off those discussions early last month.

A White House spokeswoman declined to comment on the call between Mr. Trump and Mr. Maduro. The Venezuelan government did not respond to a request for comment. Two people close to the Venezuelan government confirmed that a direct call between the two leaders had taken place. They did not want to be identified because they are not authorized to speak publicly.

What the call ultimately means for the administration’s approach to Mr. Maduro remains to be seen. Mr. Trump has a long history of engaging in dual tracks with adversaries, with discussions on one track and threats of force on the other. The Trump administration has been using missile strikes to bomb Venezuelan boats that U.S. officials say have been trafficking drugs.

Those strikes are part of a broader aggressive posture against Venezuela, where Mr. Maduro has remained in power after a 2024 election that the United States has called corrupt. The United States has sent an aircraft carrier group to the waters near Venezuela, sent Air Force bombers over the region, prepared covert action plans and made regular threats to use force.

On Thanksgiving evening, Mr. Trump, flanked by military leaders, said that the efforts to stop drug traffickers would move to land-based operations. “The land is easier, but that’s going to start very soon,” Mr. Trump told reporters at Mar-a-Lago.

And on Friday, Mr. Trump posted on Truth Social about Saturday’s elections in Honduras, endorsing the National Party’s Nasry Asfura and describing two of his rivals as controlled by Mr. Maduro.

“Will Maduro and his Narcoterrorists take over another country like they have taken over Cuba, Nicaragua, and Venezuela?” Mr. Trump wrote. “The man who is standing up for Democracy, and fighting against Maduro, is Tito Asfura, the Presidential Candidate of the National Party.”

The administration has examined a range of options for Venezuela, including seizing the country’s oil fields. Mr. Rubio, a leader of the efforts against Mr. Maduro inside the Trump administration, has described Mr. Maduro as an illegitimate president.

But the direct conversations between Mr. Trump and Mr. Maduro could be the beginning of an effort to create an off-ramp from an escalating use of force, though the administration appears intent on an outcome that requires Mr. Maduro to leave office.