A new report by venture capital firm Breed has warned that only a handful of Bitcoin treasury companies are likely to survive long-term as the sector faces increasing financial strain and market volatility.
According to the report, many BTC-holding companies are at risk of entering a so-called “death spiral” — a sequence of events triggered by a drop in Bitcoin’s price that leads to the collapse of their market premium over net asset value (NAV). The firms most vulnerable are those that rely heavily on debt or whose share prices trade close to their NAV.
“This dynamic restricts access to capital, forces asset sales under pressure, and may eventually lead to fire-sale consolidation or insolvency,” the report said.
The analysis outlines seven phases of decline, beginning with a fall in Bitcoin’s price that diminishes a company’s MNAV (market-to-NAV ratio), making it more difficult to raise funds. As financing dries up, firms could face margin calls, forcing them to liquidate holdings and further depress BTC prices — a feedback loop that could ripple across the industry.
Despite the warning, the report notes that most Bitcoin treasury firms in 2025 have used equity financing, not debt, to fund their BTC purchases — a trend that could limit broader contagion. However, that could shift if debt becomes more accessible or attractive amid rising BTC valuations.
Only firms with “strong leadership, disciplined execution, savvy marketing, and distinctive strategies” will be able to maintain their MNAV premium and avoid collapse, the authors argue.
The Bitcoin treasury trend, pioneered by MicroStrategy’s Michael Saylor, has seen explosive growth in recent years. Over 250 organizations — including corporations, ETFs, pension funds, and even government entities — now hold Bitcoin on their balance sheets, according to BitcoinTreasuries.net.
Whether the sector can weather the next major price downturn remains to be seen. But as the Breed report makes clear, discipline and strategic clarity may separate long-term winners from those destined to fail.
No comments:
Post a Comment