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Saturday Dec 6 2025 08:00
2 min
Bitcoin treasury companies are entering a “Darwinian phase” as the fundamental economics of their once-thriving business model falter, according to a recent report from Galaxy Research. The analysis suggests that the digital asset treasury (DAT) sector has reached a saturation point, with equity values dipping below Bitcoin’s (BTC) net asset value (NAV). This reversal has disrupted the issuance-driven growth cycle, transforming leverage from an advantage into a significant liability.
This critical juncture was triggered by Bitcoin’s descent from its October high near $126,000 to around $80,000, causing a substantial decrease in risk tolerance and depleting market liquidity. The deleveraging event on October 10 exacerbated this trend, erasing open interest in futures markets and reducing spot market depth. “For treasury companies whose equities had been functioning as leveraged crypto positions, the transformation has been severe,” Galaxy noted, adding that “the same financial strategies that amplified gains have now amplified losses.”
DAT stocks, previously trading at substantial premiums to NAV during the summer, are now largely discounted, even with Bitcoin’s price down only about 30% from its peak. Companies like Metaplanet and Nakamoto, which once reported hundreds of millions in unrealized profits, are now deeply in negative territory as their average BTC purchase prices exceed $107,000. Galaxy emphasized that the embedded leverage within these firms exposes them to significant downside risk, with one company, NAKA, experiencing a decline of over 98% from its peak. “This price behavior resembles the kind of collapses observed in memecoin markets,” the firm stated.
With further issuance no longer a viable option, Galaxy outlined three potential scenarios moving forward. The most likely scenario involves a prolonged period of compressed premiums, where BTC-per-share growth remains stagnant and DAT equities offer more downside than Bitcoin itself. A second possible outcome is consolidation, where companies that heavily issued stock at high premiums, purchased BTC near the market peak, or accumulated significant debt, face solvency issues and may be subject to acquisition or restructuring. The third scenario allows for a recovery if Bitcoin eventually reaches new all-time highs, but only for companies that maintained sufficient liquidity and avoided excessive issuance during the boom period.
Risk Warning: this article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform.When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients.
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