As Bitcoin treasury companies continue to struggle with falling share prices and sharply slowing Bitcoin accumulation in a tight market, many are now trading below a 1x multiple of their net asset value (MNAV).
In other words, for these “pure play” 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) launched its Bitcoin treasury strategy in mid-2024 and accumulated over 5,000 BTC. Despite this, its share price is now trading at roughly the same level it was 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 relative newcomer, Strive (ASST), the buyer is also facing its own challenges.
Strive’s stock price has fallen nearly 90% since completing the SPAC merger a month ago, leaving ASST’s valuation at just 50% of the value of the 5,885 bitcoins on its balance sheet.
The same is true of another recently completed SPAC, KindlyMD (NAKA), which is the 19th largest publicly traded Bitcoin-holding company with 5,765 BTC and trades at just 0.50x mNAV – with a market cap of approximately $300 million and Bitcoin holdings valued at approximately $631 million. The company has $250 million of convertible debt outstanding, which may partially explain the significant discount.
While these are just a few notable examples, valuations for these pure-play Bitcoin treasury companies are largely similar.
According to BitcoinQuant data, other notable names are also trading below their NAV: Capital B (ACPB) at 0.75x (at 2,818 BTC), The Smarter Web Company (SWC) at 0.72x (at 2,660 BTC), H100 Group (GS9) at 0.88x (at 1,046 BTC), and MetaPlanet (at 3350) 0.98x (holding 30,823 BTC).
These same companies were trading at significant premiums during the summer bull market. Since then, investor sentiment has rapidly shifted from optimism to caution to the current complete pessimism.
The discounts now raise an important question: Do they represent real value, or is the market reflecting broader uncertainty about these companies’ balance sheets and execution?
What can treasury companies do to get the premium back?
Perception needs to change, and that will require a strong Bitcoin market.
Bitcoin – while higher for 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 disappointing for bulls: Bitcoin has underperformed this year while stocks and precious metals rose almost daily.
Although controlling for macroeconomic events is challenging, Bitcoin treasury companies can consider several strategies to minimize discounts.
One option is to buy back their stock, which can be funded either by selling some Bitcoin or by issuing credit. However, the latter largely depends on the company’s ability to secure favorable terms and generate sufficient revenues to pay off the new debt.
An example of this is Amperi Digital, which has announced a $100 million credit facility for stock repurchases worth $150 million. However, since the announcement, the stock has fallen 10%, resulting in a loss of 60% year to date. Additionally, Sequential Communications (SQNS), which holds 3,234 BTC, recently announced an American Depositary Share (ADS) buyback program representing 10% of its outstanding shares, authorizing the repurchase of up to 1.57 million ADSs. Since this announcement it has also declined by 27%.
Another approach is to use their Bitcoin by deploying a portion of their holdings in low-yield trading or liquidity strategies that generate modest single-digit returns. This is similar to what MARA Holdings (MARA), a Bitcoin miner who is also buying BTC on the open market, has started doing.
Strategy: Last One Standing
Of the top 20 pure-play public Bitcoin-holding companies, Michael Sellar’s Strategy (MSTR) is now alone in having its BTC stack trading at a premium.
At last check, the company’s mNAV was around 1.39x. However, this is decreasing rapidly. At the strategy’s record high stock price of $543 in November 2024, it was trading at almost three times the value of its Bitcoin.
Now, almost a year later and with not only a lot more Bitcoin on its balance sheet, but a nearly 60% increase in the price of BTC, MSTR shares have fallen to $285.
It’s worth noting that an MNAV below 1.0 is not necessarily a death sentence. Even the strategy experienced similar discounts during the 2022 recession. Those who bought then were rewarded with extraordinary returns – despite the recent decline in share prices, MSTR is up nearly 10x since then.
It remains to be seen whether new entrants now grapple with challenges similar to those faced by MSTR in 2022.