A recent study from K33 Research reveals a concerning trend among Bitcoin treasury firms, particularly smaller ones. Around 25% of these publicly traded companies now have shares trading below the value of their Bitcoin reserves. This development suggests a shift towards organic demand, away from institutional purchases, challenging these companies’ capital-raising capabilities via share issuance.
How Are Smaller Firms Coping?
Smaller enterprises are hit hardest by this trend, says Vetle Lunde, who heads K33 Research. He points out that the mismatch between market valuation and net asset value can lead to share issuance becoming a costly affair for these companies, causing ownership dilution. The strategy becomes less viable for these enterprises as they seek growth through capital acquisition.
NAKA has experienced the most dramatic decline. Once a product of a merger between KindlyMD and Nakamoto Holdings, its value has plummeted by 96% from its peak. Its mNAV multiplier, once 75, now sits precariously at 0.7. Tether-backed Twenty One, Semler Scientific, and The Smarter Web Company also trade below their mNAV of 1, reflecting a broader industry trend. The average mNAV, which was 3.76 this April, has descended to 2.8.
What Slows Strategy’s Bitcoin Purchases?
Even the largest players face challenges. Strategy, led by Michael Saylor, saw its premium drop to 1.26, marking the lowest level since March 2024. As a result, the company’s ability to acquire Bitcoin through new share sales is limited, impeding its ability to bolster its portfolio.
The data from K33 indicates a notable slowdown in daily Bitcoin purchases. In September, treasury companies’ daily buying average fell to 1,428 BTC—the lowest since May. Lunde rationalizes that firms focusing solely on Bitcoin accumulation should not trade at a premium due to associated additional costs.
Market dynamics are shifting as institutional buying power wanes. Public treasury reserves have now exceeded 1 million BTC, highlighting the rising influence of ETFs and individual investors in driving growth.
– Companies trading below Bitcoin reserve value face capital-raising challenges.
– NAKA shows a stark 96% value drop, indicating severe financial strain.
– Strategy’s reduced premium impacts its Bitcoin purchase capability.
Moving forward, the emphasis on organic growth over institutional buying continues to reshape the landscape. The entry of ETFs and individual investors as significant market players signifies a pivotal transformation within the industry.
