NEW YORK / LONDON (IT BOLTWISE) – Bitcoin treasury companies are facing a new challenge as the mechanics of their business model falter. The drop in Bitcoin prices has led to a rethink in the industry, with many companies now facing significant financial stress.
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Bitcoin treasury companies are going through a critical period called the ‘Darwinian Phase’. This phase is marked by the collapse of the core mechanisms of their business model, a new analysis from industry experts shows. The digital asset treasury market has reached its natural limits as stock prices have fallen below Bitcoin’s net asset value. This has reversed the growth cycle and turned leverage into a liability.
The turning point came when Bitcoin price fell from its October high of nearly $126,000 to lows around $80,000. This triggered a sharp contraction in risk appetite and drained liquidity from the market. An event on October 10 accelerated this shift by wiping out open interest in futures markets and weakening spot depth. For treasury firms whose stocks served as leveraged crypto trades, this shift was particularly intense.
Shares of DAT companies that traded at high premiums in the summer are now mostly trading at discounts, even though Bitcoin itself is only about 30% off its highs. Companies like Metaplanet and Nakamoto, which previously showed hundreds of millions in unrealized profits, are now deep in the red as average BTC purchase prices exceed $107,000. The leverage embedded in these firms exposes them to extreme downside risks.
With the issue no longer available, the analysis has shown three possible paths. The base case is a prolonged period of compressed premiums where BTC per share growth stagnates and DAT stocks offer more downside risk than Bitcoin itself. A second possibility is consolidation, in which companies that have issued heavily at high premiums could come under pressure to be acquired or restructured. A third scenario leaves room for a recovery if Bitcoin hits new all-time highs, but only for companies that preserved liquidity and did not issue excessively during the boom.
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