Summary: Bitcoin Treasury Firms Enter a “Darwinian Phase”

Bitcoin treasury companies — firms that hold BTC on their balance sheets and trade like leveraged Bitcoin proxies — are now facing severe stress as their business model breaks down, according to Galaxy Research.

What’s Happening

• These digital asset treasury (DAT) firms had been trading at large premiums to their BTC net asset value (NAV) throughout the bull run.

• As Bitcoin fell from ~$126K to ~$80K, risk appetite collapsed and liquidity drained.

• The October 10 deleveraging wipeout erased futures open interest and further weakened spot markets.

• This has caused equity premiums to flip into discounts, turning their previously beneficial leverage against them.

Why This Is a “Darwinian Phase”

Galaxy says the cycle that once fueled growth is now reversing:

1. Leverage is now magnifying losses

• Firms that issued shares at premiums used the proceeds to buy BTC — a self-reinforcing loop on the way up.

• Now, with share prices below NAV, that same structure amplifies downside.

2. Major DAT stocks have crashed

• Previously high-flying names like Metaplanet and Nakamoto (NAKA) are now deeply underwater.

• Average BTC purchase prices are above $107,000, leaving firms with large unrealized losses.

• One firm (NAKA) is down 98% from its peak, similar to “memecoin wipeouts.”

Galaxy’s Three Possible Outcomes

1. Base Case — Long Period of Compressed Premiums

• BTC-per-share growth stalls.

• Firms trade at NAV discounts.

• Equities carry more downside risk than BTC itself.

2. Consolidation & Distress

Firms that:

• Issued too aggressively,

• Bought BTC near the top,

• Or took on debt,

…may face solvency pressure, forced acquisition, or restructuring.

3. Recovery (But Only for the Strong)

• If BTC makes new all-time highs, only firms with preserved liquidity and low issuance risk will benefit.

• Overextended firms likely won’t survive to see that upside.

Strategy’s $1.44B Capital Raise

• Strategy (formerly MicroStrategy) raised $1.44B in cash to reassure investors it can:

• Pay dividends,

• Service debt,

• Survive a prolonged BTC downturn.

• Funded through stock issuance.

• Goal: provide at least 12–24 months of financial buffer.

Bitwise CIO Matt Hougan reiterated that Strategy will not need to sell Bitcoin, pushing back against market fears.

Bottom Line

Bitcoin treasury stocks — once treated as leveraged BTC bets — are seeing their engineered upside turn into downside as conditions reverse. Most firms face a harsh survival phase, with Galaxy warning that only the most disciplined treasuries will withstand the stress.

See all our insights: Bitcoin World News