Bitcoin’s modest 2% pullback on Friday masked a deeper drawdown in equities tied to corporate bitcoin strategies, suggesting investor skepticism is intensifying around leveraged treasury plays.
Shares of Strategy Inc. (MSTR) and Semler Scientific (SMLR) fell approximately 6%, while Japan-listed Metaplanet plummeted 24%, vastly underperforming the underlying asset, which traded around $109,583 at the time of writing. Notably, MSTR is now trading over 30% below its 2024 peak, even as bitcoin itself hit new all-time highs this week.
At the heart of the sell-off is a growing concern about the sustainability of these firms’ bitcoin accumulation models, which rely heavily on raising equity at premiums to their net asset value (NAV) and using proceeds to purchase additional BTC. The strategy hinges on maintaining an mNAV—a market valuation above the value of their bitcoin reserves—giving companies room to continue capitalizing on investor demand.
But as shares drift lower, that mNAV premium shrinks, potentially choking off future capital raises and exposing these firms to liquidity risk, especially if they’ve layered in convertible debt or preferred equity obligations. In essence, the model works until markets stop assigning a premium.
Social media commentary added fuel to the fire. “This is the GBTC cycle all over again,” wrote crypto investor lowstrife, referring to the now-ETFed Grayscale Bitcoin Trust, which famously traded at a steep discount in 2022 and sparked a string of blowups across the industry. Others echoed that sentiment, warning of another leveraged unwind lurking in plain sight.
Yet not all market watchers are pessimistic. Blockstream CEO Adam Back countered that firms can manage downside mNAV scenarios by selling bitcoin and buying back stock to boost per-share metrics. “Either they do that, or the market corrects itself before it gets that far,” he posted.
Still, the divergence between bitcoin’s spot performance and its equity proxies suggests the market is beginning to separate BTC the asset from BTC the balance sheet strategy—a sign of maturing investor expectations as corporate adoption enters a more complex phase.
