Matthew Sigel, Head of Digital Assets Research at VanEck, has raised a red flag for publicly traded companies pursuing aggressive Bitcoin treasury strategies.
According to Sigel, no Bitcoin-holding public firm has historically traded below its Bitcoin net asset value (NAV) for long. But at least one is now approaching that line—and with it, the risks of shareholder dilution are rising.
ATM Issuance Near NAV Can Destroy Value
Sigel cautions that as some Bitcoin treasury firms continue raising funds through at-the-market (ATM) equity programs, the margin for error is shrinking. If a company’s stock drifts close to or below its Bitcoin-backed NAV, issuing new shares doesn’t build capital—it erodes shareholder value.
“Once you are trading at NAV, shareholder dilution is no longer strategic. It is extractive,” Sigel wrote.
Actionable Safeguards for BTC-Focused Firms
To avoid a repeat of missteps seen in the crypto mining sector—marked by persistent dilution and excessive executive pay—Sigel proposes a set of protective measures for boards and investors:
- Halt ATM issuance if the stock price stays below 0.95x NAV for 10+ trading sessions.
- Prioritize buybacks when Bitcoin rises but the equity fails to reflect the gain.
- Launch strategic reviews—including potential mergers, spinoffs, or abandoning the BTC strategy—if discounts persist.
He also emphasizes the need for executive compensation tied to NAV per share growth, not just the size of the Bitcoin position or share count.
Time to Act While Premiums Still Exist
Sigel’s message is clear: act now, while there’s still breathing room. Boards should take preemptive steps to preserve value, protect optionality, and avoid a situation where BTC exposure ends up hurting rather than helping shareholders.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
Source: https://coindoo.com/btc-treasury-firms-face-value-erosion-vaneck-director-warns/