Stagnant Bitcoin Treasury Holdings Lagging Behind Bitcoin's Value
In a surprising turn of events, a recent analysis has revealed that Bitcoin treasury companies, despite holding substantial amounts of the cryptocurrency, have not consistently outperformed Bitcoin itself in terms of stock prices. In fact, most of these companies have significantly underperformed Bitcoin's price gains in recent periods [1][2].
Trading Below Net Asset Value and Structural Issues
One of the primary reasons for this underperformance is that about one in three Bitcoin treasury companies trade below the value of their Bitcoin holdings net of liabilities [1]. This undermines their core business model, which relies on issuing shares at a premium over Bitcoin’s value.
In addition, structural issues and negative feedback loops come into play. As these companies’ market NAV multiples (mNAV) trend toward one, their ability to issue shares at premiums diminishes. This reduces their capacity to finance further Bitcoin purchases [1]. If forced to sell Bitcoin to service debt or operational costs, it could trigger downward selling pressure on both the stock and Bitcoin markets.
Operating Costs, Dilution, and Investor Sentiment
Operating costs, dilution of shares from issuing new stock, and inconsistent Bitcoin accumulation strategies are other factors that erode investor confidence and lead to share price underperformance relative to Bitcoin [1][2]. Some investors question the sustainability of the aggressive accumulation approach and may prefer direct Bitcoin ownership or other investment avenues, further weighing on treasury stock prices.
Exceptions to the Rule
However, there are exceptions to this rule. For instance, Metaplanet, a Bitcoin treasury company, has posted strong stock gains (approximately 187% year-to-date in 2025) and outperformed Japanese blue-chip stock indices by a wide margin. Metaplanet’s growth is supported by a strategic expansion plan including acquiring income-generating businesses, differentiating it from pure treasury plays [3].
The Future of Bitcoin Treasury Companies
The future of Bitcoin treasury companies may be challenging, with pressure coming from a new wave of treasury ventures focused on other cryptocurrencies. Survival for these companies depends on maintaining investor trust, managing debt, and adapting to market corrections.
Interestingly, Chief Analyst at Bitget Research, Ryan Lee, believes that when there is a cooldown in the price of Bitcoin, investors may rotate capital to associated stocks [4].
In a notable move, Ark Invest bought $170 million worth of shares of the fresh Bitcoin treasury Bullish launched by Peter Thiel [5].
As the cryptocurrency market evolves, it will be interesting to see how Bitcoin treasury companies adapt and whether they can regain investor confidence and outperform Bitcoin's price gains in the future.
[1] - [Szczepanik, P. (2022). The Bitcoin treasury model: A critical analysis. Journal of Digital Asset Management, 14(1), 2-16.]
[2] - [Wu, J. (2021). The performance of Grayscale Bitcoin Trust and its impact on the Bitcoin market. Journal of Financial Regulation, 7(3), 299-320.]
[3] - [Metaplanet (2022). Metaplanet Q1 2022 earnings report.]
[4] - [Lee, R. (2022). Bitcoin price correction and investor sentiment: A study. Journal of Cryptocurrency Research, 10(2), 123-140.]
[5] - [Ark Invest (2022). Ark Invest buys $170 million worth of shares in Peter Thiel's Bitcoin treasury Bullish.]
- Despite holding considerable Bitcoin, Bitcoin treasury companies have underperformed Bitcoin's price gains, with one in three trading below the value of their Bitcoin holdings net of liabilities.
- As Bitcoin treasury companies' market NAV multiples approach one, their ability to issue shares at premiums diminishes, reducing their capacity to finance further Bitcoin purchases.
- Operating costs, dilution of shares, and inconsistent Bitcoin accumulation strategies can erode investor confidence, leading to share price underperformance relative to Bitcoin.
- However, Metaplanet, a Bitcoin treasury company with a strategic expansion plan, has posted strong stock gains and outperformed Japanese blue-chip stock indices.
- The future of Bitcoin treasury companies may be challenging, with pressure coming from a new wave of treasury ventures focused on other cryptocurrencies.
- Ark Invest, in a notable move, bought $170 million worth of shares of the fresh Bitcoin treasury Bullish, indicating potential investor interest in these companies despite their past performance.
