Digital asset treasury firms, once hailed for leveraging Bitcoin holdings, are now facing a significant challenge: their stock prices are increasingly decoupling from the value of their underlying digital assets. This concerning trend, identified by experts like NYDIG, suggests a turbulent period ahead unless proactive measures are taken to restore investor confidence and firm valuations.
Digital Asset Treasury Firms Face Shrinking Premiums
Despite Bitcoin reaching new highs, the premium of digital asset treasury (DAT) firms' stock prices over their Net Asset Value (NAV) is rapidly shrinking. Greg Cipolaro, NYDIG's global director of research, highlights that this "compression" is evident in major Bitcoin buyers such as Metaplanet and Strategy. Several factors contribute to this erosion: investor anxiety surrounding upcoming supply unlocks, shifting corporate objectives, increased issuance of new shares, profit-taking by existing investors, and a perceived lack of differentiation among treasury strategies. This signals a shift in how investors value these firms, moving away from a simple premium over their crypto holdings.
Navigating Future Turbulence: The Case for Share Buybacks
The future outlook for these firms appears challenging, with a "turbulent period" predicted, especially for those awaiting mergers or financing deals that could trigger substantial sell-offs from existing shareholders. Many DATs, including KindlyMD and Twenty One Capital, are already trading at or below their recent funding valuations, indicating potential further downward pressure once shares become freely tradable. To counteract this, Cipolaro strongly advises DATs to implement share buyback programs. By reserving funds for buybacks, companies can reduce the circulating supply of their shares, directly supporting stock prices and signaling confidence to the market, thus aiming to bring stock values back above their NAV.
Slowing Pace of Bitcoin Accumulation
Adding another layer to the challenge, the rate at which these firms are acquiring Bitcoin has begun to decelerate. While corporate Bitcoin holdings reached an impressive 840,000 BTC this year—with Strategy holding a dominant 76%—the monthly acquisition volume has slowed significantly. CryptoQuant data indicates a reduction in the total amount of Bitcoin bought by companies in recent months, alongside a decrease in the average purchase size per transaction. For instance, Strategy's average purchase size plummeted from 14,000 BTC to 1,200 BTC, while other firms saw an 86% drop. This slowdown in accumulation suggests a shift in capital deployment strategies and a potential decrease in conviction or capacity for aggressive Bitcoin purchasing among these treasury firms.
