- Bitcoin treasury companies are the hottest trend in crypto.
- These companies hold nearly $112 billion in Bitcoin.
- But many are trading below their premiums.
- That jeopardises their entire business model, analysts warn.
Bitcoin treasury companies are in trouble.
Their idea was simple: buy Bitcoin, package it in a corporate wrapper, and watch traders pay a premium for the shares. Then issue more stock. Rinse and repeat. On paper, it’s a perpetual money printer.
The problem? One in three of the 156 publicly listed crypto treasury firms tracked by Capriole Investments now trade below a market net asset value, or mNAV, multiple of one. That means investors value these businesses for less than what their Bitcoin’s worth. Others put that figure at one in seven.
And the gap is expected to widen.
“There are structural reasons that suggest we may continue to see mNAVs dropping for some treasury companies,” Carlos Guzmán, VP of research at GSR, told DL News.
That could force many companies to indiscriminately sell Bitcoin to pay the debt used to buy it. In turn, that could create a negative feedback loop of selling pressure that drags down share and crypto prices, Coinbase warned in a June report, suggesting that crypto treasury companies posed systemic risks.
Most treasury firms can’t maintain the aggressive accumulation needed to justify a premium, Bitcoin analyst James Check argued in a June newsletter.
As mNAVs inevitably drift towards one, the window to issue shares at a premium — and convert the proceeds into more Bitcoin — shrinks.
Add operating costs, dilution, inconsistent buys, and investor fatigue toward strategies that aren’t all-in on buying Bitcoin, and underperformance becomes more likely, Check said.
Premiums turn into discounts
The whole pitch of a Bitcoin treasury is to do what Strategy did: turn a stash of coins into a stock that trades at a premium.
That still holds true for Strategy, which commands a 34% premium to its more than $71 billion Bitcoin hoard, due to its years-long effort to build credibility with shareholders and scale the idea into one of crypto’s hottest trends.
Yet, many firms are failing to copy the strategy.
The sector’s average mNAV has been declining since May, Blockworks data shows. Despite the bull market, the list of sub-one mNAV companies is growing — a sign investors are getting pickier about which firms deserve a premium.
NAV cuts both ways: if demand for a company’s shares falls, the price can drop below the value of the assets it holds, creating a discount.
Crypto firms are no strangers to this. Grayscale’s Bitcoin Trust once traded at a 50% discount. Even after it converted into a spot exchange-traded fund, which narrowed the gap, billions flowed to cheaper rivals provided by BlackRock and Fidelity.
A sub-one mNAV doesn’t automatically mean undervalued. Bulls see opportunity, while bears see justified scepticism and risk. But the days when any corporate Bitcoin wallet could command a premium may be over.
Indeed, share prices have been struggling despite Bitcoin’s rally, suggesting they’ve decoupled from the underlying assets.
Strategy is down 20% over the past month.
Jack Mallers’ Twenty One Capital has shed 16% and Metaplanet has dropped 33% over the past 30 days.
Other players, like Semler Scientific, have lost more than half their share price value from their late December peak.
Even KULR Technology — an early adopter compared to the 2025 rush — has seen its shares plummet as much as 87%.
None of those firms responded to requests for comment.
‘Spiral of doom’
This shouldn’t be happening. Bitcoin’s August all-time high above $124,000 should’ve lifted these stocks in theory.
One reason behind the dip is that most newcomers lack Strategy Chair Michael Saylor’s leverage, investor base, and track record, said Check. For them, a sub-one mNAV means increased debt loads, dilution risk, and credibility issues that are dragging valuations lower.
That’s a problem as many of Bitcoin treasuries have little beyond their crypto stash, according to legendary short-seller Jim Chanos. Some have even abandoned their core businesses to go all-in on crypto.
The market may also lack confidence in unproven leadership, Guzmán said.
Newer digital asset firms may also struggle to maintain investor interest.
“Attention tends to focus on a limited number of high-quality, successful teams,” Guzmán added.
“That makes it harder for the long tail of digital asset treasuries to trade at a premium, and may cause them to slide into discount territory in bearish market conditions.”
The mix of weak management, dilution risk, and limited brand recognition could spell disaster.
Take Strategy. On Monday, the company changed its dilution rules, prompting former Goldman Sachs analyst Dom Kwok to warn of a “spiral of doom.”
If the firm is forced to sell shares at thinner premiums just to stay afloat, shareholder value gets eroded, interest costs mount, and Strategy could be forced to offload Bitcoin to cover its obligations, said Kwok.
Strategy did not reply to a request for comment from DL News.
Are fears overblown?
Still, not everyone thinks a market-wide collapse is inevitable.
André Dragosch, European head of research at Bitwise, told DL News that the dangers are overblown.
“The risks are relatively limited,” he said. He added that some Strategy copycats might struggle because of their higher cost basis, lack a proper understanding of the asset, execution, and communication strategy.
Even so, Dragosch said leveraged purchases act as a flywheel that amplifies both upside and downside volatility.
He believes most mNAV discounts are due to Bitcoin’s price action, not fundamental problems.
“I personally don’t think that we will see an increasing number of mNAV discounts over the medium to long term,” he said.
Value beyond stacking
Still, the appetite for accumulation hasn’t vanished.
“It’s clear the market is keen to have crypto treasury companies accumulate more assets,” Spencer Yang, managing partner at BlockSpaceForce, told DL News.
“But I’d love to see these companies add even more value to the crypto ecosystem beyond asset accumulation.”
Pedro Solimano is DL News’ Buenos Aires-based markets correspondent. Got a tip? Email at psolimano@dlnews.com.
Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.