Strategy’s Bitcoin Playbook Backfires as Treasury Companies Lose Their Premium Edge

TLDR

• Over 25% of Bitcoin treasury companies now trade below the value of their actual crypto holdings, eliminating their stock premium advantage
• Strategy (formerly MicroStrategy) holds more than 640,000 Bitcoin worth roughly $71 billion but has seen its stock drop 25% since December 2025
• Public companies have invested over $100 billion in cryptocurrencies, with Strategy owning more than 3% of all Bitcoin in existence
• Many companies are using debt and outside investor capital rather than operational cash to finance crypto purchases, creating leverage risks
• Bitcoin dropped from over $124,000 to around $110,400 following tariff announcements, testing the treasury model’s resilience

Bitcoin treasury companies are facing their first major stress test as stock premiums vanish and token prices fall. More than one-quarter of public companies using a Bitcoin treasury strategy now have market values below their actual digital token holdings, according to K33 Research.

The crypto treasury model exploded in popularity throughout 2025. Companies following the playbook pioneered by Strategy raised over $100 billion to stockpile cryptocurrencies. Strategy itself holds more than 640,000 Bitcoin, representing over 3% of the world’s total supply.

Many firms quickly pivoted to crypto treasury strategies after announcing plans. Companies like 180 Life Sciences rebranded as ETHZilla and saw its stock price quintuple. Eightco jumped 3,000% in a single day on plans to accumulate Worldcoin.

The model relies on a premium valuation cycle. Companies sell shares above their asset value, use proceeds to buy more tokens, watch prices rise, then sell more shares at higher premiums. This circle worked well during crypto’s climb to a $4 trillion total market value.

But the cycle breaks when premiums disappear. Investors have little reason to buy stock trading below net asset value when they can purchase tokens directly. Companies may then need to sell holdings to cover operating costs or debt payments.

Strategy exemplifies both the model’s success and current challenges. The company is valued at roughly $86 billion with $71 billion in Bitcoin holdings. Its stock has fallen 25% since December 2025.

The company’s enterprise value to Bitcoin ratio dropped from over 2.0 to approximately 1.4. Strategy bought its Bitcoin at an average price of $74,000, providing some cushion against current prices around $110,400.

Market Pressures Mount

Bitcoin recently fell from over $124,000 after President Donald Trump announced new tariffs on Chinese imports. This sharp drop tests whether treasury companies can maintain their strategies during downturns.

Investment manager Kerrisdale Capital disclosed short positions against crypto treasury stocks. The firm argues that premium valuations cannot last when competitors can copy the model and exchange-traded funds offer simpler exposure.

Strategy has issued $14.8 billion in debt and preferred stock to finance purchases. Its holdings currently cover these obligations. A sustained downturn could force the company to pause buying or suspend dividends.

Japan’s Metaplanet, a top-five Bitcoin holder, dropped 65% over three months and now trades below net asset value. CleanCore Solutions fell more than 80% after buying Dogecoin.

Industry Skepticism Grows

Most treasury companies raise capital from outside investors rather than using operational cash flow. This creates leverage that magnifies both gains and losses. About 25% now trade below their net asset value.

Trump Media & Technology Group entered the space with 15,000 Bitcoin, ranking among the top 10 holders globally. Dozens of companies from healthcare to entertainment sectors have adopted similar strategies.

SharpLink Gaming transformed from an online gambling affiliate marketer to an Ethereum treasury company. Pure-play crypto treasury firms focus exclusively on accumulating specific tokens like Bitcoin, Ethereum, Solana, or XRP.

Strategy purchased its Bitcoin at an average cost of $74,000 per token. Standard Chartered predicts Bitcoin could reach $500,000 by 2028. The bank’s digital assets head Geoffrey Kendrick compared Bitcoin’s trajectory to gold’s gains.

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