As bitcoin treasury companies continue to battle falling share prices and rapidly slowing bitcoin accumulation in a tight market, many now trade below a 1x multiple of their net asset value (mNAV).
In other words, for these “pure” treasury holders (i.e. excluding miners like MARA Holdings and broader crypto platforms like Bullish), their market capitalization has fallen below the value of their bitcoin holdings.
Semler Scientific (SMLR) started its bitcoin treasury strategy in mid-2024 and accumulated over 5,000 BTC. Despite that, its share price now trades at around the same level as when the company began its bitcoin journey, around $24 per share, which now gives the company an mNAV of just 0.80x.
While Semler is currently in the process of being acquired by a newcomer, Strive (ASST), the buyer also faces its own challenges.
A roughly 90% drop in Strive’s share price since completing a SPAC merger just over a month ago has left ASST’s valuation at only about 50% of the value of the 5,885 bitcoins on its balance sheet.
This is also the case with another recently completed SPAC, KindlyMD (NAKA), the 19th publicly traded bitcoin holding company, which owns 5,765 BTC and trades at just 0.50x mNAV – a market cap of about $300 million and bitcoin holdings worth about $631 million. The company has $250 million in convertible debt outstanding, which could partly explain the significant discount.
While these are just a few notable examples, valuations are largely the same across the board for these unique bitcoin treasury companies.
Other notable names are also trading below their NAV, according to BitcoinQuant data: Capital B (ACPB) at 0.75x (with 2,818 BTC), The Smarter Web Company (SWC) at 0.72x (with 2,660 BTC), H100 Group (GS9) at 0.88x (with 1,046 BTC), and Metaplanet (3,350) at 0.98x (holding 30,823 BTC).
These same companies were trading at significant premiums during the summer bull market. Since then, investor sentiment has swung sharply from optimism to caution to now complete despair.
The discounts now raise an important question: Do they represent real value or is the market reflecting broader uncertainty about the balance sheets and execution of these companies?
What can treasuries do to return to a premium?
Sentiment must change, and that will likely require a stronger bitcoin market.
Bitcoin, although higher over the year, is now at roughly the same level it was on January 20, the day of President Trump’s inauguration. One aspect has been particularly frustrating for bulls: Bitcoin has done little this year while stocks and precious metals have continued to rise almost daily.
While it is challenging to monitor macroeconomic events, bitcoin treasury companies can consider several strategies to mitigate the discount.
One option is to buy back your shares, which can be financed by selling some bitcoins or issuing credit. The latter, however, depends largely on a company’s ability to obtain favorable terms and generate sufficient income to pay off the new debt.
An example of this is Empery Digital, which has announced a $100 million credit facility to fund $150 million worth of share buybacks. However, since this announcement, the stock has fallen 10%, resulting in losses of 60% year-to-date. Additionally, Sequans Communications (SQNS), which holds 3,234 BTC, recently announced an American Depositary Share (ADS) buyback program representing 10% of its outstanding shares, authorizing the buyback of up to 1.57 million ADS. It is also down 27% since this announcement.
Another approach is to use your bitcoins by deploying a portion of your holdings into low-yield trading or liquidity strategies that generate modest single-digit returns. This is similar to what a bitcoin miner who is also buying BTC on the open market, MARA Holdings (MARA), has started doing.
Strategy: last one standing
Among the top 20 public bitcoin holding companies, Michael Saylor’s (MSTR) strategy is now the only one trading at a premium to his BTC stack.
At last check, the company’s mNAV was approximately 1.39x. However, this figure has been reducing rapidly. At Strategy’s record share price of $543 in November 2024, it was trading for nearly triple the value of its bitcoin.
Now, about a year later and with not only much more bitcoin on its balance sheet, but also a rally of around 60% in the price of BTC, MSTR shares have fallen to $285.
It is worth noting that a mNAV less than 1.0 is not necessarily a death sentence. Even Strategy saw a similar discount during the 2022 recession. Those who bought then were rewarded with exceptional returns: MSTR has risen nearly 10x since then, even with the recent drop in share prices.
It remains to be seen whether new entrants now facing similar challenges as MSTR faced in 2022 can also achieve a recovery.
