Bitcoin Treasury Companies Face Skepticism Amid Market Volatility

Bitcoin treasury companies aim to accumulate Bitcoin by issuing debt or equity, which can work well in bull markets but tends to perform poorly in bear markets.

The recent surge in Bitcoin's price has been welcome news for these companies, with Strategy being the one that holds the most Bitcoin. However, its market valuation relative to the Bitcoin it holds (mNAV) is down from 3.89 in late 2024 to 1.06 as of August 28.

This decline reflects a lack of trust in the Bitcoin treasury model and investors are right to be skeptical. The approach only works when the premium and price of Bitcoin both increase, leading to outsize returns. However, this is not a sustainable business model as it doesn't produce anything of value other than financial engineering to buy more Bitcoin.

Strategy's software business made just $247 million in revenue over the first six months of 2026, highlighting that buying Bitcoin isn't a viable long-term strategy for these companies. In fact, several Bitcoin treasury companies have been forced to sell their holdings this year due to financial difficulties.