Remember when every earnings call seemed to include the phrase “Bitcoin treasury strategy”? It felt unstoppable. Companies were borrowing cheap money, stacking sats, and watching their market caps balloon far beyond the actual value of the coins they held. The loop was beautiful while it lasted.
Now flip the calendar to late November 2025 and that same loop looks ready to run in reverse – and fast.
The Treasury Trade Is Suddenly Underwater
For years the playbook was simple and brutally effective. A public company announces it’s putting Bitcoin on the balance sheet. The stock pops 20-50% almost overnight because investors price in a “Bitcoin premium”. Management then issues convertible debt or equity at the inflated valuation and buys even more BTC. Rinse and repeat.
It worked because the market treated these companies like leveraged Bitcoin ETFs with a corporate wrapper. The higher the stock flew, the more Bitcoin they could afford to buy, which justified an even higher stock price. Pure reflexivity in action.
But reflexivity cuts both ways.
As I write this, several of the biggest corporate Bitcoin holders are watching their market capitalizations dip below the spot value of the Bitcoin they own. That has never happened before at scale. When your own shareholders value your company less than the coins sitting in cold storage, something has to give.
The Math Is Getting Ugly
Take the most prominent example (I won’t name names because everyone already knows who the 800-pound gorilla is). Roughly $56 billion in Bitcoin on the books, yet the market cap has slipped to around $49 billion in recent sessions. That’s a $7 billion gap. In other words, the market is literally saying the operating business itself has negative value.
Other treasury adopters in Japan and Europe are seeing similar discounts – sometimes 20-30% below net asset value. For management teams that spent the last three years preaching “Bitcoin is the ultimate reserve asset,” this is more than embarrassing. It’s an existential problem.
Why the Disconnect Appeared Now
Several things broke at once.
- Macro risk-off sentiment finally hit crypto after months of resilience
- Bitcoin failed to break $100k decisively, shaking the “inevitable moon” narrative
- Leveraged positions built up during the rally are getting squeezed
- Investors are rotating back to traditional yield-generating assets as real rates rise
- Regulatory uncertainty around accounting treatment hasn’t been resolved
Add it all up and the “Bitcoin premium” that once justified sky-high valuations has evaporated. Without that premium, these companies suddenly look like over-leveraged hedge funds with terrible expense ratios.
“It’s a classic reflexivity unwind. The same mechanism that drove valuations far above NAV is now pushing them far below it. And the easiest way to close the gap is to sell the asset that caused the premium in the first place.”
– Senior analyst at a major crypto research firm
The Fire-Sale Incentive Is Real
Think about the decision from the board’s perspective. You can keep holding Bitcoin and hope the price recovers enough to bring the stock back in line – a bet that could take months or years. Or you can sell a portion of the Bitcoin stack, use the proceeds to repurchase deeply discounted shares, and instantly shrink or eliminate the NAV discount.
The second option is textbook capital allocation in public markets. Warren Buffett would do it in a heartbeat if one of his companies traded 30% below liquidation value. The fact that the asset happens to be Bitcoin doesn’t change the math.
In my view, the moment a major player actually executes that trade – sells Bitcoin to buy back stock – it will be seen as a watershed moment. The spell breaks. Every other treasury company gets the green light to do the same.
Potential Cascade Effects
Here’s where it gets scary.
If multiple companies start liquidating Bitcoin simultaneously, the price impact could be significant. Lower Bitcoin price → wider NAV discounts → more incentive to sell → lower Bitcoin price. A genuine feedback loop.
- Bitcoin spot ETFs would see forced selling from arbitrage desks
- Retail panic could accelerate the move
- Derivatives liquidations would pile on
- The narrative flips from “corporate treasury adoption = price floor” to “corporate treasury adoption = overhead supply”
We’ve seen this movie before with different assets. Gold in the early 1980s. Tech stocks in 2000. Even oil majors divesting reserves at the bottom. When the marginal buyer becomes the marginal seller, the psychology shifts permanently until capitulation.
Not Every Company Will Fold
To be clear, some of these firms have genuinely long time horizons and religious conviction about Bitcoin’s role as a reserve asset. They’ve structured their holdings in ways that make selling difficult or impossible without destroying the core thesis of the company.
Others have made public statements that they will “never sell” except for tax-loss harvesting or specific strategic reasons. For those true believers, riding out a 50% drawdown might still be preferable to abandoning the strategy.
But conviction is expensive when your stock is down 60% from its highs and shareholders are screaming.
What History Teaches Us
Look back at previous corporate treasury experiments. Companies that loaded up on commodities or foreign currency in the 1970s and 1980s almost universally regretted it when the cycles turned. The ones that survived were the ones that cut losses early and refocused on their core business.
Bitcoin maximalists will hate hearing this, but from a pure corporate finance standpoint, holding a volatile, non-yielding asset on the balance sheet is a governance nightmare waiting to happen.
Possible Ways This Resolves
- Scenario 1 – Orderly Deleveraging: A few smaller players sell, Bitcoin dips 15-25%, conviction holders absorb the supply, cycle stabilizes.
- Scenario 2 – Disorderly Unwind: Multiple large holders sell concurrently, Bitcoin drops 40-60% in weeks, forcing even die-hards to reconsider.
- Scenario 3 – External Rescue: Bitcoin rips higher on new catalyst (ETF inflows, nation-state buying, etc.), discounts close naturally, loop stays intact.
- Scenario 4 – Hybrid Outcome: Some companies sell, others double down using the dip to issue more debt/equity, mixed results.
My personal base case? We’re heading toward Scenario 2 unless something dramatic changes in the next few weeks. The incentives are simply too strong and the discounts too wide.
What It Means for Regular Investors
If you own Bitcoin directly, this is overhead supply risk you haven’t really priced in before. Corporate treasuries were supposed to be the “smart money” that only bought and never sold. Discovering they can and will sell – possibly in size – changes the demand profile.
If you own any of these treasury stocks, the next few board meetings are going to be fascinating. Watch the language around “shareholder value maximization” and “capital allocation priorities.” Those are the code words for what’s coming.
Either way, the era of frictionless, one-way corporate Bitcoin accumulation appears to be on pause – and possibly ending.
Sometimes the smartest trade is the one everyone thought was permanent… until it wasn’t.
The next few weeks will tell us whether the Bitcoin corporate treasury experiment becomes a historic success story or just another chapter in the long history of financial manias.
Either way, it’s going to be one hell of a ride.
