A Model Under Pressure

The corporate strategy of stockpiling Bitcoin is facing its first major stress test as falling token prices erase the stock premiums that once fueled the trend. According to K33 Research, more than a quarter of public companies with a Bitcoin treasury strategy now have market capitalizations below the value of their digital asset holdings.

This model, which gained significant traction throughout 2025, saw companies raise over $100 billion to purchase cryptocurrencies. The playbook was simple: sell company shares at a premium to the underlying asset value, use the proceeds to buy more crypto, and repeat the cycle as the token’s price appreciated. This created a virtuous cycle that worked flawlessly during crypto’s ascent to a $4 trillion market cap. However, that cycle breaks when the premium disappears, leaving investors with little incentive to own the stock when they can buy the tokens directly.

Strategy’s High-Stakes Bet

Strategy (formerly MicroStrategy), the pioneer of this approach, exemplifies both the model’s massive scale and its current vulnerabilities. The company holds an immense portfolio of over 640,000 Bitcoin, worth roughly $71 billion and representing more than 3% of all BTC in existence. Yet, its stock has dropped 25% since December 2025, and its enterprise value relative to its Bitcoin holdings has fallen from a ratio of over 2.0 to approximately 1.4.

While the company has a buffer—its average purchase price was $74,000 per Bitcoin, well below the current price of around $110,400—it has financed its acquisitions with $14.8 billion in debt and preferred stock. A sustained market downturn could challenge its ability to service these obligations without selling its crypto assets.

Market Contagion and Growing Skepticism

Recent market volatility has amplified the pressure. Bitcoin recently fell from over $124,000 to near $110,400 following President Donald Trump’s announcement of new tariffs on Chinese imports, testing the resilience of these corporate treasuries. The fallout is visible across the sector, with Japan’s Metaplanet, a top-five Bitcoin holder, seeing its stock drop 65% in three months to trade below its net asset value. Similarly, CleanCore Solutions fell more than 80% after acquiring Dogecoin.

This has attracted skepticism from both traditional and crypto-native analysts. Investment firm Kerrisdale Capital has disclosed short positions against these stocks, arguing that premium valuations are unsustainable when exchange-traded funds (ETFs) offer simpler exposure. Within the crypto industry, BitMine CEO Tom Lee described the situation as a “bubble that has burst.” Matthew Hougan of Bitwise Asset Management noted that companies merely copying Strategy’s playbook should trade at discounts, not premiums.

The risk is magnified because most of these companies use capital from outside investors rather than their own operational cash flow, creating leverage that amplifies both gains and losses. Despite the risks, the trend has attracted a diverse range of firms, from Trump Media & Technology Group to former online gambling marketer SharpLink Gaming, which pivoted to become an Ethereum treasury company.

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