Standard Chartered warns: only the strongest players will survive the collapse of Bitcoin treasury companies.
The phenomenon of companies adopting bitcoin and other digital assets as part of their treasury strategy is going through a critical phase, according to an analysis released on September 15 by Standard Chartered. Firms that followed Strategy’s successful example of accumulating bitcoin are now facing a sharp decline in their market valuations.
The boom in Bitcoin treasury companies initially attracted investors’ attention to cryptocurrencies such as Bitcoin, Ethereum, and Solana. However, in recent weeks, the collapse of market net asset values (mNAV) has exposed many of these firms to growing risks, calling into question the sustainability of their business model.
How the model works
In the world of Bitcoin treasury companies, mNAV represents the ratio between a company’s enterprise value and the value of its digital assets. When this indicator is above 1, companies can issue new shares and continue accumulating cryptocurrencies. Conversely, falling below this critical threshold makes it extremely difficult and risky to further expand reserves.
Standard Chartered highlighted how several firms have recently crossed this limit, effectively losing the ability to continue their strategic purchases. The British bank expects this situation to inevitably lead to market differentiation and a sector-wide consolidation process.
Saturation and consolidation
The financial institution has tracked the performance of companies such as Strategy, Bitmine, Metaplanet, Sharplink Gaming, Upexi, and DeFi Development Corp, documenting how their valuations have significantly declined in recent weeks.
According to analysts, the compression of corporate mNAVs is driven by four main factors: market saturation, growing investor caution, unsustainable business models, and the rapid expansion of Ethereum– and Solana-based strategies.
“Market saturation is the main driver of the recent mNAV compression,” the analysts wrote, noting that Strategy’s success in acquiring bitcoin has already generated 89 imitators.
Growing risks
If mNAVs remain at low levels, Standard Chartered expects a general consolidation of the sector, with larger players ready to acquire weaker competitors. Strategy, for example, could maintain its aggressive bitcoin accumulation strategy by acquiring other competitors trading at a discount.
Venture capital firm Breed had already warned in June that only a handful of companies are likely to escape a “death spiral” triggered by the decline in mNAVs.
Experts agree that the sector is undergoing a phase of forced maturation. Only companies with strong leadership, disciplined execution, smart marketing, and distinctive strategies that continue to grow their Bitcoin-per-share ratio regardless of market fluctuations will be able to sustain a lasting mNAV premium.
