Bitcoin treasury stocks have plummeted in the past few months, erasing billions of dollars in value. Michael Saylor’s MSTR stock price has plunged by 40% from its highest point in 2024.
Similarly, in Japan, Metaplanet stock is down by 70% from its highest point this year. Donald Trump’s Trump Media (DJT) is down by 71% from its September highs.
Most of the biggest Bitcoin treasury companies, such as MicroCloud Hologram (HOLO), MicroAlgo, Semler Scientific, and Bullish, have all plunged in the past few months.
Bitcoin Treasury Stocks Have Plunged as Their Premium Fell
One reason why the Bitcoin treasury stocks have plummeted is that their premium has plunged, with some trading below book value. A good example of this is Strategy, which used to trade an mNAV of over 3.4 in November last year. Today, this figure has dropped to 1.2.
Other good examples of this are MicroCloud Hologram and Semler Scientific mNAV multiples have moved below zero. Metaplanet’s mNAV has plunged to 1.24.
The falling mNAV is a major issue for these companies as it hinders their fundraising, which they use to buy Bitcoins. Indeed, Michael Saylor recently tweaked his previous rule that his company would not sell shares if the mNAV was below 2.5%, a move that has led to more dilution.
Rotation from BTC Treasury Companies to Spot Bitcoin ETFs
Another potential reason why Bitcoin treasury companies are struggling is that investors are now preferring the stability of spot Bitcoin ETFs like IBIT and FBTC instead of these companies. Recent data shows that these ETFs have accumulated over $57 billion in assets.
One reason for this is that Bitcoin ETF holders are not subject to dilution. For example, MSTR investors have seen their shares diluted substantially in the past few years as the company has continued to raise money to buy Bitcoin.
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The Industry is Now Crowded
For a long time, MicroStrategy was the only name in the game, which helped push its stock to record highs. Today, the industry has become highly saturated, with over 170 companies that hold over 1 million coins.
One of the things that most of these companies have in common is that their businesses were struggling, which pushed them to adopt a strategy that ultimately saved their business. For instance, GameStop’s video game retail business is struggling, whereas Trump Media’s Truth Social has seen limited success.
As such, the fact that there are so many treasury companies means that their appeal among investors is waning.
There are other reasons why these Bitcoin treasury stocks are falling. For example, some of them are highly shorted, with MSTR having a short interest of 9% and Trump Media having 5%. Also, some of them, like Metaplanet, are falling amid profit-taking among investors.
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