Collapsing equity premiums, rising leverage risks and falling NAVs push digital asset treasury companies into a critical shakeout
Bitcoin treasury firms are facing their most severe stress test to date as collapsing premiums and shifting market structure push the sector into what analysts describe as a “Darwinian phase.” A new assessment warns that the Digital Asset Treasury (DAT) trade has reached a structural breaking point, with leverage now working sharply against companies that once benefited from it.
According to the latest analysis, the business model behind DAT firms began to unravel when Bitcoin’s price fell from its October peak near $126,000 to lows around $80,000. The drop erased risk appetite across the market and broke the issuance-driven growth loop that allowed treasury firms to accumulate BTC at scale. The October 10 deleveraging event accelerated the downturn, wiping out open interest in futures and reducing spot liquidity.
For months, many DAT firms functioned as leveraged Bitcoin proxies, trading at steep premiums to their net asset value. But those premiums have now flipped to discounts, even as Bitcoin sits only about 30% below its highs. Companies such as Metaplanet and Nakamoto Corporation — which previously held hundreds of millions in unrealized profits — now hold BTC at average purchase prices above $107,000, putting their positions deep underwater.
Some firms are facing extreme downside, with NAKA dropping more than 98% from its peak — a collapse analysts liken to memecoin-style wipeouts.
Galaxy outlines three potential outcomes a prolonged period of compressed premiums, a wave of consolidations as distressed firms confront solvency risks, or a selective recovery for companies that preserved liquidity and avoided excessive issuance.
In response to rising investor concerns, Strategy announced a $1.44 billion cash reserve, funded through a stock offering, to stabilize dividend expectations and strengthen its near-term balance sheet. Leadership maintains that the company will not be forced to liquidate Bitcoin holdings, even amid continued market pressure.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.