The strategy of companies holding Bitcoin on their balance sheets is facing a major test as their stock prices are falling far behind the performance of Bitcoin itself. Once seen as a way for investors to get exposure to Bitcoin, these “Bitcoin proxy” stocks are now trading at a discount, raising questions about the viability of the entire model.
The article highlights Strategy, a company that pioneered the corporate Bitcoin treasury model, as a prime example of this trend. Its stock has plummeted from July highs of over $500 to around $326, even though Bitcoin itself has only dropped slightly from its peak. This decline is a major problem for Strategy’s business model, which relied on its stock trading at a premium to the value of its Bitcoin holdings. This premium allowed the company to sell new shares at a high price and use the money to buy more Bitcoin, a process known as a “flywheel.” With its stock now trading close to the value of its Bitcoin, this strategy is losing its effectiveness.
The issue isn’t limited to Strategy. The article notes that many corporate Bitcoin holders, including Metaplanet in Japan, are seeing their stocks drop significantly. Metaplanet’s shares have fallen by more than 60% since June, despite its ambitious plans to acquire a huge amount of Bitcoin. This widespread decline suggests that the broader market is losing faith in these corporate proxies.
Experts are sounding the alarm, with one analyst calling the current situation a “last gasp of a cycle that couldn’t come up with anything better than this silliness.” The drop in stock prices below the value of their Bitcoin holdings could force some companies to sell their crypto to cover debts, potentially causing more strain on the market.
Ultimately, the article concludes that the growing gap between Bitcoin’s price and the value of its corporate holders’ stocks is a critical moment for the sector. The future of these companies depends on whether they can adapt and prove they are a worthwhile investment, or if they will become a cautionary tale for the industry.
September 2025, Cryptoniteuae
