DAT’s All, Folks? What’s Next for Bitcoin Treasury Companies

Introduction 

In July, Galaxy Research argued that the digital asset treasury company (now typically abbreviated as DAT) model worked only as long as a company’s equity premium held. At the time, these stocks were trading at lofty multiples of their underlying bitcoin (or other cryptocurrency) net asset values (NAVs), sustained by an accretive loop between price, issuance, and accumulation.  

The bitcoin treasury model is fundamentally a liquidity derivative. It works only when the equity trades at a premium to its BTC NAV. Once those premiums collapse, the entire flywheel reverses.  

The core warning in Galaxy Research’s July alert on bitcoin treasury companies and broader report on DATs was that this reflexive cycle would stall once premiums tightened and equity issuance became dilutive rather than accretive. That exact scenario has arrived.  

Bitcoin has fallen from ~$126k in October to as low as ~$80k (at the time of writing, it’s rebounded to around $92,000), knocking the wind out of the high-beta treasury trade. The macro backdrop has turned increasingly risk-off: inflows to crypto exchange-traded funds (ETFs) have slowed and speculative appetite across public markets has waned. As Galaxy Research wrote in October, the Oct. 10 deleveraging event was a significant forced-selling cascade that flushed leverage out of the system and left liquidity conditions materially weaker heading into Q4. We also discussed on the Galaxy Brains podcast how bitcoin may already have entered a cyclical bear market, given deteriorating liquidity and the breakdown of several key market structure supports.  

For treasury companies whose equities had been serving as leveraged crypto trades, the shift has been intense. The same financial engineering that amplified upside has magnified downside.  

Note: This report exclusively discusses bitcoin DATs. Companies that invest in ETH or SOL can derive income from staking or DeFi lending in addition to capital appreciation, and as such warrant a separate analysis. 

Key Takeaways 

• Equity valuations for DAT companies, which traded at significant premiums to NAV over the summer, have fallen, and are now often trading at discounts to their underlying holdings. 

• Bitcoin treasury stocks are down dramatically from their 2025 highs, severely underperforming BTC itself. 

• Most treasury company bitcoin purchases are underwater; unrealized losses are beginning to show up. 

• Galaxy Research’s July forecast that this reflexive loop would break once premiums tightened has proven correct. 

• The high beta of DAT equities to BTC amplified gains on the way up, but on the way down, premiums have collapsed and dilution has become extractive. 

Methodology 

In this piece, we calculate equity premiums to BTC NAV using market capitalization rather than the more traditional enterprise value. Enterprise value is standard for valuing operating businesses, but bitcoin treasury companies function primarily as asset-holding vehicles whose valuations are driven by BTC-per-share exposure rather than cash flows.  

Hence, market capitalization provides a more direct and economically accurate reference point for comparing equity value to BTC NAV. Premiums and discounts may differ under an enterprise-value based approach (which is typically what is used to calculate the multiple to net asset value, or mNAV). 

This analysis focuses on Strategy (MSTR), Metaplanet (3350.T), Semler Scientific (SMLR), and Nakamoto (NAKA) because each represents a different profile within the bitcoin treasury company landscape. Strategy is the largest corporate bitcoin holder in the world, the most visible such entity, and the one with the longest track record. Metaplanet is the most aggressive accumulator and the most transparent. Semler Scientific was relatively early to the trend, initiating its bitcoin purchases last year. Nakamoto offers a useful view into how newer entrants approached BTC accumulation later in the cycle. 

What Happened? 

The Oct. 10 deleveraging event marked an inflection point. Forced liquidations of perpetual futures positions across centralized and onchain venues triggered a sharp reduction in open interest, tightening liquidity conditions across crypto markets. That deleveraging cascaded into the broader crypto market with risk appetite waning and spot-market depth deteriorating. Galaxy Research analyzed the event here. 

For DATs, the feedback loop has been direct: 

• Lower BTC price  

• Lower BTC NAV per share 

• Compression of equity premiums to NAV 

• Reduced ability to issue shares accretively 

The exact same mechanism that allowed companies to issue stock above NAV and buy BTC is now working in reverse. With shares now trading below NAV, investors are beginning to question whether some firms may eventually need to sell BTC. 

The chart below shows percentage drawdowns across four selected bitcoin treasury companies: Strategy (MSTR), Metaplanet (3350.T), Semler Scientific (SMLR), and Kindly MD, the company that merged with Nakamoto Holdings and now trades as NAKA. The magnitude of drawdowns across the board is striking. Nakamoto suffered a more than 98% drawdown in stock price. This price action resembles the kind of wipeouts seen in memecoin markets. 

Also notable is the extremity of the drawdowns relative to bitcoin itself. BTC is down roughly 30% from its highs. In a market as volatile as crypto, such a move is hardly unusual. But as Galaxy Research noted over the summer, these treasury companies are leveraged plays on bitcoin exposure. When BTC, the asset, goes down x%, investors should reasonably expect bitcoin treasury company shares to decline x+y%.  

DAT equities effectively combined operational, financial, and issuance leverage. That triple leverage can deliver extraordinary outperformance on the way up and equally extraordinary underperformance on the way down.  

Unrealized PnL 

The unrealized profit and losses (PnL) on Metaplanet’s dashboard illustrate how quickly conditions have shifted. While the company boasted over $600 million in unrealized profits in early October, it is now showing approximately $530 million in unrealized losses as of December 1. 

The table below, from Galaxy Research’s July 2025 report, shows the unrealized PnL of bitcoin treasury companies as of July 28.

Firms were sitting on healthy unrealized PnL when BTC traded near $118,000. Now that BTC is trading at around $92,000 (as of the time of writing), their average cost is not looking as good. Metaplanet and Nakamoto have average BTC costs above $107,000, meaning their unrealized PnL is firmly in the red.  

The table below shows updated unrealized PnL through Dec. 1. (Note: we have swapped ALTBG for NAKA because the latter is more relevant.)  

This chart assumes a BTC price of $85,000.  

Equity Premiums to BTC NAV 

 Equity premiums to NAV have compressed mightily since July, when they were significantly high.  

In this section, we calculate equity premiums using current market capitalization (shares outstanding × share price) relative to BTC NAV. 

The chart below shows the market-cap premiums to BTC NAV for Strategy (MSTR), Metaplanet (3350.T), and Semler Scientific (SMLR) since the beginning of 2025. The steady compressions across all three illustrate how quickly the issuance premiums have evaporated once BTC weakened and risk appetite faded.  

We exclude NAKA from this chart because the company accumulated the vast majority of its BTC holdings beginning in August, which makes earlier-period readings not comparable to the other firms.  

Here is a table comparing premiums from the report published in July, when Metaplanet was trading at 236% of its BTC NAV. 

Here is the updated table (again, we have swapped ALTBG for NAKA). 

What Now? 

It seems fair to say the first phase of the bitcoin treasury trade is over. The model didn’t just mysteriously stop working; it hit the natural boundary condition Galaxy Research laid out in July. Once the equity trades at or below BTC NAV, issuance becomes a tax instead of a growth engine. That is now the state of affairs.   

From here, three plausible outcomes could emerge, potentially at the same time across different firms, depending on the health of their balance sheets and their access to capital. 

Premiums stay compressed (base case) 

As long as crypto markets remain soft, most DATs are likely to trade at flat or negative premiums to NAV. In that world:  

• BTC per share, the core KPI that determines whether issuance is accretive or dilutive, will stagnate or decline. 

• DAT equities will offer a levered downside, not upside, versus spot BTC 

Investors should not expect the early 2025 “equity beta > BTC beta” regime to reappear without a full reset in risk appetite and BTC making new highs.  

Selective survival and consolidation 

This drawdown is a balance-sheet stress test. Firms with the least flexibility include those that:  

• Issued the most stock at the highest premium; 

• Bought the most BTC at cycle-top prices; and  

• Layered on debt against those holdings 

Prolonged discounts plus large unrealized losses are likely to create real solvency and governance pressure. Expect potential restructurings and stronger players (including Strategy) to be well-positioned to acquire weaker ones at a discount or to simply outlast them.   

In other words, treasury companies are about to enter a Darwinian phase.  

Strategy’s recent announcement of a $1.44 billion cash reserve is a good example of this. For years, Strategy has relied almost entirely on its BTC reserve and access to capital markets to manage liquidity. But with issuance conditions changing, the firm has now established a sizable dollar reserve (funded via at-the-market, or ATM, equity sales) to cover at least 12 months of dividend and interest commitments.   

This step marks a significant evolution in the DAT model. Strategy is signaling to markets that it is planning to weather a prolonged period of compressed premiums and weaker BTC prices. Instead of just pure BTC accumulation, liquidity management is becoming more of a strategic priority. 

Optionality on the next cycle 

In principle, the treasury company trade isn’t dead. If and when BTC eventually prints new all-time highs, some subset of these companies will likely regain modest equity premiums and reopen the issuance flywheel. But the bar appears to be higher now. Boards and management teams are going to be judged on how they handled this first real stress test. Did they over-issue into the top? Did they preserve optionality? How did they handle the downturn? Are their shareholders willing to get back on for another ride?  

The key shift is that these companies now look less like simply “leveraged upside on BTC” plays and more like path-dependent instruments whose payoffs depend heavily on issuance strategy and entry timing.  

A passage from Galaxy Research’s July report bears repeating: “The DATCO model is vulnerable to premium collapses, regulatory changes, and capital market disruptions. Companies that rely too heavily on PIPEs or excessive leverage may suffer brutal drawdowns in less favorable market conditions.” 

Data dashboards cited in this report: 

https://www.strategy.com/ 

https://metaplanet.jp/en/analytics 

https://nakamoto.com/dashboard 

https://ir.semlerscientific.com/dashboard