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Datavault AI Stock Plummets 50% as June Bitcoin Withdrawal Stalls
The shares of Datavault AI plummeted almost fifty percent following the announcement that the company has been unable to retrieve Bitcoin held at the crypto exchange Biconomy since initiating a…
The shares of Datavault AI plummeted almost fifty percent following the announcement that the company has been unable to retrieve Bitcoin held at the crypto exchange Biconomy since initiating a transfer request back in June.
This revelation caused the stock to hit $0.060, aligning with its lowest point over the past year and dramatically falling from a peak of $3.78, leaving the firm with a market valuation hovering near $65 million.
According to a Form 8-K submitted to the SEC on October 26, Datavault received $150 million worth of Bitcoin from Scilex on September 25, 2025, as payment stemming from an equity purchase agreement; at that time, each unit was valued at roughly $112,915, meaning the total BTC involved in the deal was around 1,328.
However, the actual amount transferred into Datavault's Biconomy account was 1,309.04 BTC, which accounted for a deduction of 19.39 BTC to cover cash advances provided by Scilex to the company. Subsequently, Datavault transferred 491.431 BTC back to Scilex during September 2025 and January 2026 in exchange for approximately $40.5 million in cash, while the remaining cryptocurrency remained secured in the digital wallet managed by Biconomy.
It is noteworthy that Datavault stated all these transactions occurred off-chain, indicating that the assets were tracked on the exchange's ledgers rather than being recorded on the Bitcoin network itself. Although the company requested the Bitcoin withdrawal to an external account in June, this process remained unfinished by the time the 8-K filing was made, and no explanation for this delay was provided.
Furthermore, the filing detailed that "Subsequent to the issuance of the Affected Financial Statements and following a review of the transaction, the Company determined that the Bitcoin associated with the Scilex Equity Purchase did not meet the requirements for recognition as a digital asset of the Company," the document added. Consequently, Datavault's leadership is now evaluating its operational viability, especially because the BTC had been considered a source of funds, and the company is uncertain about its ability to secure payment from Scilex.
The market's response to this news was severe; Google Finance data showed the firm's DVLT shares closing at $0.067 on October 28, registering a drop of 49.55%, after dipping as low as $0.060 throughout the trading day. At the moment of this writing, the market capitalization stood at approximately $65 million, though the stock later climbed to $0.071 during after-hours trading.
This situation highlights the inherent risks carried by Bitcoin treasury firms, as CryptoPotato previously reported, noting that Smarter Web Company CEO Andrew Webley had cautioned that such treasury entities can expose investors to Bitcoin's inherent volatility and frequently rely on managers whose financial decisions might prove detrimental. The immediate concern for Datavault centers on when and if it can regain access to the BTC currently held by its custodian. The initial report on the "Datavault AI Stock Plunges 50% as Bitcoin Withdrawal Stalls" appeared on CryptoPotato.
Why it matters
This incident highlights significant operational risks for crypto treasury companies relying on off-chain custody arrangements. Investors should watch how Datavault resolves its inability to access its BTC holdings, which directly impacts its financial stability.
