Crypto Treasury Companies on the Brink of Survival: The Market is Changing the Rules of the Game
Date: 2025-12-08 Author: Henry Casey Categories: BUSINESS
Analysts at Galaxy Research have stated that Bitcoin-focused crypto treasury companies have entered a so-called "Darwinian phase," where only the most resilient market participants will survive. The main reason is the dramatic change in financial conditions: previously stable premiums to net asset value (NAV) have given way to discounts, and leverage has transformed from a tool for accelerated growth into a source of increased risk.
Until recently, the business model of DAT companies was built on a simple principle: issuing new shares allowed them to raise capital at a premium, increase Bitcoin reserves, and boost returns through borrowed funds. However, after Bitcoin fell from levels above $120,000 to around $80,000, the situation has changed dramatically. Tightening conditions in the futures market, increased investor caution, and reduced liquidity have rendered this mechanism ineffective.
Today, the securities of many digital treasury companies are trading below their net asset value. This means that additional issuance no longer produces the same effect and does not stimulate balance sheet expansion. On the contrary, it could increase pressure on stock prices and worsen the financial position of issuers.
The market has hit particularly hard companies that had built large positions at high prices. For example, Metaplanet and Nakamoto, which had previously shown significant unrealized profits, now find themselves in the red due to an average purchase price above $107,000. In some cases, the declines have become extreme: Nakamoto shares have lost more than 98% of their all-time high.
Galaxy identifies three possible scenarios for how the situation will unfold. The base case assumes protracted stagnation. In this case, asset premiums will remain at minimal levels, and Bitcoin per share will stop growing. In this scenario, DAT company shares will exhibit higher downside risk than Bitcoin itself.
The second scenario is market consolidation. Companies with high debt loads or aggressive issuance near market peaks may face pressure from creditors, forced restructurings, or acquisitions. This will lead to a reduction in the number of players and a strengthening of the most established players.
The third scenario involves a partial price recovery. However, this is only possible for those issuers that managed to maintain sufficient liquidity and did not over-issue shares during the period of rapid growth. In this case, Bitcoin's growth could restore investor confidence and partially restore lost ground.
Galaxy emphasizes that the key factor will remain Bitcoin's future dynamics, as well as the ability of companies to adapt to the new reality, where rapid growth is no longer guaranteed and capital management errors are punished by the market almost immediately.
