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|4 min ReadThe Harsh Truth: Most Bitcoin Treasury Firms Are Doomed
Lucca Menezes
Senior Analyst
Published
Jan 16, 2026
They copied Strategy’s balance sheet. But they never copied its capital structure.
Strategy built a $70 billion reserve by holding Bitcoin. Now every token project wants to become a “digital asset treasury.” But here’s the problem — one in four Bitcoin treasury companies are already worth less than the assets they hold.
The category exploded over the past year. Total assets jumped from 142 billion, almost matching DeFi’s total value locked. Nearly 90 percent of those assets are Bitcoin and Ethereum. But that growth came not from business performance or financial innovation, only from rising crypto prices.
Even that boom isn’t shared evenly. Strategy alone controls 63 percent of all publicly held Bitcoin. The top six firms own most of the rest. Everyone else — the smaller Digital Asset Treasuries (DATs) — trade thinly, their premiums fragile, their valuations swinging with Bitcoin’s price instead of their own performance.
The Reflexive Loop That Broke
When markets rise, treasury firms trade at a premium above their net asset value. Investors pay extra for a compliant way to gain Bitcoin or Ethereum exposure. With that premium, companies issue new shares, raise more cash, buy more crypto, and push their asset base higher. It’s a reflexive feedback loop — price up, raise money, buy more, repeat.
By mid-2025, the loop collapsed. Bitcoin treasury premiums dropped from 1.9× to 1.3×. Ethereum and Solana reserves fell even harder — from 4.8× to around 1.3× in just two months.
Why Strategy Survived When Others Sank
Strategy didn’t just build a treasury. It built a financial instrument.
While others diluted shareholders to buy more Bitcoin, Strategy raised $4 billion through convertible bonds and senior notes, with long-term rates near 0.8 percent. That debt let the company turn volatility into leverage. When Bitcoin moves 1 percent, its stock moves a little more — a high-beta Bitcoin proxy, fully compliant and tradable.
This made Strategy’s stock irresistible. Funds, ETFs, and debt traders could play its swings without touching crypto directly. Its volatility became a market of its own.
The Copycats Missed the Core
Most new treasury firms copied only what was easy — the balance sheet. They didn’t replicate the debt engine that powers Strategy.
Strategy’s capital stack — convertible notes, senior debt, and deep liquidity — turned volatility into funding. Others couldn’t. They tried to earn yield instead of raising real capital. They staked, lent, or bought tokenized treasuries to simulate returns.
It worked in a bull market. Yields stayed high, liquidity looked fine, and everyone felt clever. But it was all reflexive risk in disguise. When cycles turned, redemptions surged, yields collapsed, and they were forced to sell locked assets at a loss.
That’s exactly what’s happening now. Premiums that once traded at three or four times book value have vanished. Even Ethereum- and Solana-based “yield treasuries” are wobbling, because their solvency still lives and dies with token prices.
The game isn’t over yet — but for most Bitcoin treasury firms, the end has already begun.
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.