Are There Cracks Appearing in Bitcoin Treasury Companies?

For a while, Bitcoin treasury companies seemed unstoppable. Shares sprinted higher on every BTC gain, and the promise of holding stacks of Bitcoin lit up balance sheets from New York to Tokyo.

But the honeymoon is officially over for some Bitcoin treasury companies. September’s market has been brutal, exposing cracks and testing every player in the space.

That’s because the new form of “Bitcoin banks” isn’t immune to price shocks, confusing business models, or investor nerves.

And recently, several firms have watched their stock prices and premiums tumble in real time.

NAKA: The Stress Test No One Wanted

Case in point, NAKA stock. In just 10 days, NAKA plunged almost 35% intraday and stayed volatile, as options roared and the market turned bearish. NAKA’s executive chairman, David Bailey, wrote on Twitter:

“Last I checked our options IV imply a 2000% cost to borrow (the highest in the nation afaik), meaning the market is heavily betting against us.”

What caused such turmoil? The answer isn’t as simple as “Bitcoin is volatile.” NAKA sits in a sector facing more skepticism. The healthcare and treasury hybrid faces regulatory uncertainty and intense speculation in the options chain.

That volatility is amplified whenever leverage unwinds or sentiment flips. In recent sessions, NAKA saw turnover spike and technical indicators flash “oversold” warnings.

Beyond NAKA: Premiums, MNAVs, and Strategy’s S&P 500 Setback

The problems aren’t limited to Nakamoto, as Bailey commented in a separate post:

“The entire treasury sector is being tested, and rightfully so. Toxic financing, failed altcoins rebranded as DATs, too many failed companies with no plan or vision. The treasury company moniker itself is confusing.”

For Bailey, conviction is everything, but he warns: those who fail to create real value will trade at a discount or get taken out by stronger operators.

Across the sector, one in three Bitcoin treasury companies now trades at or below its market net asset value (mNAV).

For investors, that’s a red flag. It means stock prices no longer reflect the value of underlying Bitcoin reserves.

This negative spiral has even hit some giant Bitcoin treasury companies. MicroStrategy, now rebranded as “Strategy,” suffered a surprising blow when it was omitted from the S&P 500 in September.

Despite a $25 billion market cap and massive Bitcoin position, the committee wasn’t convinced. JPMorgan called the decision a “significant blow to the entire corporate crypto treasury industry.”

The snub also raises questions about the role and risk profile of publicly listed Bitcoin treasury companies.

Moreover, market premiums (the extra price paid for Bitcoin exposure via treasury stocks) are shrinking fast.

Treasury firms are buying much less Bitcoin than a year ago. New entrants aren’t fixing the decline, and investors are reconsidering whether the business model works in this tougher environment.

Recent months have seen Strategy’s mNAV fall toward 1.25. During high-volatility periods, these premiums used to spike above 2.0, especially when Bitcoin treasury companies could raise funds at a premium and buy more Bitcoin.

Now, with suppressed volatility and slowing accumulation, the premium is gone. Unless volatility returns and companies resume large-scale purchases, Bitcoin treasuries may struggle to justify their valuations.

What’s Next for Bitcoin Treasury Companies?

Bailey sees the current pain as a chance for a reset. He says:

“The bitcoin treasury company of the fiat system is a bank. Today, we are building Bitcoin banks. If you do it well, you will grow your assets. If you do it poorly, you will trade at a discount and be consumed by someone who can do it better.”

Bailey’s central thesis: institutions must build and monetize their balance sheets with discipline. The bottom line? Execution trumps hype.

For treasury companies, resilience and transparency are now essential.

Volatility and uncertainty will remain high in the months ahead, and the shakeout isn’t over; not for NAKA, not for Strategy, and not for any Bitcoin treasury company with eyes on the future