Retail investors have reportedly lost roughly $17 billion while trying to gain exposure to Bitcoin through publicly listed companies that hold the cryptocurrency in their corporate treasuries.
Firms like Japan’s Metaplanet and Michael Saylor’s Strategy became popular because they offered retail traders an easy way to “own Bitcoin” via the stock market. The losses came as these companies sold shares at prices far above the actual value of their respective Bitcoin holdings.
According to the report titled “After the Magic: How Bitcoin Treasury Firms Must Evolve Beyond NAV Illusions” by Singapore-based 10X Research, these inflated share prices have now crashed, leaving many investors holding shares worth far less than what they paid.
At the height of the boom, digital assets treasury (DAT) companies could sell stock at big premiums, sometimes two to seven times the value of the Bitcoin they owned. Those premiums have now disappeared, marking the end of what analysts call the “age of financial magic” for Bitcoin treasury companies.
10X Research highlights that Metaplanet is a key example. Its $1 billion Bitcoin investment once supported a market value of $8 billion. Now, its market cap is $3.1 billion, backed by $3.3 billion in Bitcoin. Similarly, Strategy’s shares have fallen sharply, from premiums triple or quadruple the Bitcoin value to just 1.4 times today.
The collapse in Bitcoin treasury stocks has created a harsh reality. While many retail investors are underwater, the report notes that companies converting inflated capital into real Bitcoin could create opportunities for disciplined investors. Firms that adapt and are run by experienced management teams may still generate strong returns, according to 10X Research.
The recent stock moves highlight the shift. Strategy (MSTR) has fallen 39% from its November 2024 peak, closing at $289.87. Metaplanet (MTPLF) has dropped 79% from its June peak, now at 402 yen ($2.67), according to Yahoo Finance.
According to analysts, the reset can set a new stage for Bitcoin asset managers who are well-funded, talented, and poised to reap future growth. It may be a time worth observing for investors as the environment for Bitcoin treasury businesses shifts.