Falling Premiums Put Pressure on Crypto Treasury Firms: NYDIG

The premiums of crypto treasury firms are steadily declining, and the situation may worsen unless companies take corrective action, according to New York Digital Investment Group (NYDIG). 

Greg Cipolaro, NYDIG’s global head of research, said on Friday that major Bitcoin-buying firms such as Metaplanet and Strategy are seeing their stock prices compress against their net asset values (NAV), despite Bitcoin reaching new highs in recent months.

“The forces behind this compression appear to be varied,” Cipolaro noted. Investor anxiety over upcoming supply unlocks, shifting corporate strategies, increased share issuance, profit-taking, and limited differentiation among treasury strategies are contributing factors. 

As crypto treasury firms continue to attract billions in investments, analysts warn that investors are increasingly scrutinizing share prices relative to underlying assets to assess the health of these companies.

Stock Buybacks Seen as Crucial Support

Cipolaro warned that crypto treasury firms may face a “bumpy ride” ahead as many wait for mergers or financing rounds to go public. He highlighted that this could trigger a “substantial wave of selling” by shareholders looking to exit once lock-up periods expire. 

Firms such as KindlyMD and Twenty One Capital are reportedly trading at or below the value of recent fundraising rounds, a trend that could worsen if share prices continue to drop.

“If shares in a treasury company traded below its NAV, the most straightforward course of action would be stock buybacks,” Cipolaro explained. These buybacks help raise share prices by reducing supply and reinforcing investor confidence. 

“If we were to give one piece of advice to DATs, it’s to save some of the funds raised aside to support shares via buybacks,” he added.

Crypto Treasury Holdings Peak but Buying Slows

Despite these challenges, Bitcoin holdings among treasury companies have hit record highs this year. A CryptoQuant report released Friday shows that these firms collectively hold 840,000 BTC, with Strategy accounting for 76%, or 637,000 BTC. However, while the number of purchases per month has increased, the total volume of Bitcoin acquired has slowed.

In August, the total amount of Bitcoin bought fell below the yearly monthly average, with firms making fewer purchases per transaction. Michael Saylor-led Strategy’s average Bitcoin purchase size dropped to 1,200 BTC from its March peak of 14,000 BTC. Similarly, other firms saw an 86% decline from their peak of 2,400 BTC.

This slowdown has affected growth rates as well. Strategy’s monthly growth rate fell to 5% in August, down from 44% in December 2024. Other firms’ growth rates dropped to 8% from 163% earlier in the year.