Bitcoin Treasury Company Discount: Who's at Risk

Before spot bitcoin ETFs existed, buying stock in a company like Strategy was one of the few practical ways for many investors, retirement accounts and funds with mandates against holding crypto directly, to get bitcoin exposure through a normal brokerage account. That scarcity was worth paying for, so these stocks traded at a premium to the net asset value (NAV) of the bitcoin they held. Treasury companies built a flywheel on top of that premium: issue new shares while the stock trades above NAV, use the cash to buy more bitcoin, and the resulting rise in bitcoin-per-share justifies the premium continuing.

Spot ETFs, which launched in January 2024, broke the first link in that chain. They gave any investor cheap, instant bitcoin exposure inside a brokerage account, which is exactly the thing that used to make the treasury-company stock special. Premiums across the sector have been compressing gradually ever since, not because of any single company's bad news, but because the core reason to pay extra for the stock version of bitcoin quietly disappeared.

Now that BTC itself is roughly 40% below its October high, the math has turned hostile. Market cap divided by the value of bitcoin held, known as mNAV, has fallen toward or below 1.0x for much of the sector. Third-party trackers had Strategy's mNAV near 0.68x in early August before it rebounded to roughly 1.05x by mid-month as bitcoin bounced (Strategy's own dashboard metric, which calculates the ratio differently, never fell that far). Below 1.0x, issuing new shares to buy more bitcoin stops adding bitcoin-per-share and starts diluting it, which is why Strategy has not bought bitcoin since roughly June 21.

The firms in real trouble are the ones that leveraged up during the 2024-25 premium era, borrowing through convertible debt to buy more bitcoin than their equity alone could fund. That worked while the stock traded above NAV and could be refinanced or converted cheaply. It stops working once the stock trades at a discount, because nobody wants to refinance a discounted company at attractive terms.

Satsuma Technology is the clearest case study: shareholders approved a wind-down with 90.6% support, and the stock is set to delist from the London Stock Exchange on September 14, with proceeds distributed rather than the bitcoin held for another cycle. Nakamoto has been selling assets and debt to stay solvent. Genius Group liquidated its entire bitcoin treasury back in the first quarter to cover an $8.5 million debt, leaving it with zero BTC exposure by the time this latest slide hit. Twenty One Capital posted a $414 million loss for the second quarter and brought in a new CEO to rethink its approach. None of these are isolated stories; they're the same mechanism playing out at different speeds, a falling bitcoin price and a falling equity premium compounding each other until the company can't raise capital except by selling the bitcoin it was supposed to be accumulating.

Not every treasury company is in that position. Strategy has stopped buying but hasn't sold, and its size and liquidity give it room to simply wait out a down cycle without being forced into anything. Metaplanet is arguably ahead of the problem: CEO Simon Gerovich has floated share buybacks specifically because, when mNAV drops below 1.0x, buying back the company's own discounted stock adds more bitcoin-per-share than buying bitcoin directly at current prices would.

Consolidation is the other pressure valve, and it's already happening rather than theoretical. Strive completed its acquisition of Semler Scientific in January, absorbing a smaller treasury company into a larger one instead of letting it wind down entirely. Expect more of this: distressed balance sheets and desperate management teams are exactly the conditions that produce cheap acquisitions.

Galaxy Research has described the sector as entering a "Darwinian phase" and expects at least five more treasury companies to face asset sales, restructuring or closure before conditions improve. The base case, in other words, is more of the same: compressed premiums and flat bitcoin-per-share growth for the survivors, more forced sales among the leveraged small-caps, and further opportunistic acquisitions mopping up the weakest names.

The bull case is that bitcoin reclaims ground toward its October highs quickly enough to lift premiums back above 1.0x before the next wave of convertible-note maturities lands. In that scenario, companies already buying back discounted stock, Metaplanet especially, get rewarded first, since they'll have grown bitcoin-per-share while everyone else was frozen.

The bear case is that bitcoin stalls or slides further through late 2026 and into 2027 while more debt matures, producing additional Satsuma-style forced liquidations. The risk is that the discount becomes self-reinforcing: a company trading below NAV can't raise capital on decent terms, so it has to sell bitcoin to survive, which further undermines confidence in both the stock and the broader sector narrative.

The next round of quarterly bitcoin-holdings and mNAV updates from Strategy, Metaplanet, Twenty One Capital and smaller peers will show whether the bifurcation between survivors and casualties is widening or narrowing. Satsuma's September 14 delisting is worth watching as the completed liquidation case study other struggling firms may end up following. Convertible-note maturity walls at smaller, leveraged treasury companies are the most likely source of the next forced seller. And any resumption of bitcoin buying by Strategy, its first since June, would be the clearest signal yet that the flywheel is starting to turn again rather than continuing to unwind.