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Bitcoin Treasury Companies Face Potential Challenges Amid Market Dynamics
According to Cointelegraph, a recent report from venture capital firm Breed highlights the potential challenges facing Bitcoin (BTC) treasury companies. The report suggests that only a few of these companies will withstand the "death spiral" that threatens those trading close to their net asset value (NAV), which is calculated as a business entity's total assets minus its liabilities. The report emphasizes that the sustainability of Bitcoin treasury companies depends on their ability to maintain a multiple of their net asset value (MNAV).
Breed's analysis outlines a seven-phase decline for BTC treasury companies, beginning with a drop in Bitcoin's price that leads to a decrease in MNAV, causing a company's share price to approach its actual NAV. This situation complicates the ability of BTC holding companies to secure necessary debt and equity financing, which is crucial for converting the inflationary US dollar into a supply-capped appreciating asset. As credit access diminishes and debt maturity approaches, margin calls may force firms to sell BTC, further lowering its price and leading to consolidation among holding companies. This could potentially trigger a prolonged market downturn. The report notes that only a select few companies will maintain a lasting MNAV premium through strong leadership, disciplined execution, savvy marketing, and distinctive strategies that grow Bitcoin-per-share despite market fluctuations.
The report also suggests that this "death spiral" could initiate the next crypto bear market. However, it points out that most BTC treasury companies currently finance their purchases with equity rather than debt, which may contain the potential implosion. The authors caution that the situation could change if debt financing becomes more prevalent than equity financing. Despite these challenges, Bitcoin treasury companies have become a significant trend in 2025. Michael Saylor's company, Strategy, has been purchasing Bitcoin since 2020, popularizing the BTC corporate treasury concept, which has gained considerable momentum over the past two years. Currently, over 250 organizations, including corporations, government entities, exchange-traded funds (ETFs), pension funds, and digital asset service providers, hold Bitcoin, according to BitcoinTreasuries.
Breed's analysis outlines a seven-phase decline for BTC treasury companies, beginning with a drop in Bitcoin's price that leads to a decrease in MNAV, causing a company's share price to approach its actual NAV. This situation complicates the ability of BTC holding companies to secure necessary debt and equity financing, which is crucial for converting the inflationary US dollar into a supply-capped appreciating asset. As credit access diminishes and debt maturity approaches, margin calls may force firms to sell BTC, further lowering its price and leading to consolidation among holding companies. This could potentially trigger a prolonged market downturn. The report notes that only a select few companies will maintain a lasting MNAV premium through strong leadership, disciplined execution, savvy marketing, and distinctive strategies that grow Bitcoin-per-share despite market fluctuations.
The report also suggests that this "death spiral" could initiate the next crypto bear market. However, it points out that most BTC treasury companies currently finance their purchases with equity rather than debt, which may contain the potential implosion. The authors caution that the situation could change if debt financing becomes more prevalent than equity financing. Despite these challenges, Bitcoin treasury companies have become a significant trend in 2025. Michael Saylor's company, Strategy, has been purchasing Bitcoin since 2020, popularizing the BTC corporate treasury concept, which has gained considerable momentum over the past two years. Currently, over 250 organizations, including corporations, government entities, exchange-traded funds (ETFs), pension funds, and digital asset service providers, hold Bitcoin, according to BitcoinTreasuries.
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