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Bitcoin Treasury Firms Trade Below Asset Value Amid Market Slump

Bitcoin Treasury Companies Facing Deep Discounts Amid Market Challenges in 2024

  • Many Bitcoin treasury companies are now trading below the value of their bitcoin holdings, showing market caps under a 1x multiple to net asset value (mNAV).
  • Semler Scientific and Strive, both recent entrants, face share prices far lower than their bitcoin reserves suggest.
  • Several pure-play bitcoin holders, including KindlyMD, Capital B, and The Smarter Web Company, also trade at deep discounts to their NAV.
  • Companies have tried stock buybacks and low-yield trading strategies to close these valuation gaps but have seen limited success.
  • Strategy (MSTR) remains the only top bitcoin treasury company trading above its bitcoin holdings’ net value, although its premium has narrowed.

Many publicly traded bitcoin treasury companies are now valued below the worth of their bitcoin holdings. This decline has occurred amid falling share prices and slower bitcoin accumulation during a tightening market in 2024.

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Semler Scientific (SMLR) began its bitcoin strategy in mid-2024 and holds over 5,000 BTC. Despite this, its stock trades around $24 per share, close to its price when it started buying bitcoin, resulting in an mNAV near 0.80x. The company is being acquired by Strive (ASST), which itself has seen about a 90% drop in its stock price after a SPAC merger, putting ASST’s market value at roughly half of its bitcoin assets (5,885 BTC).

Similarly, KindlyMD (NAKA), ranked as the 19th largest public bitcoin holder with 5,765 BTC, trades at about 0.50x mNAV with a market cap near $300 million, against bitcoin holdings valued over $630 million. The company’s $250 million in convertible debt may partly explain the large discount.

Other companies also trading below their NAV include Capital B (ACPB) at 0.75x with 2,818 BTC, The Smarter Web Company (SWC) at 0.72x holding 2,660 BTC, H100 Group (GS9) at 0.88x with 1,046 BTC, and Metaplanet (3350), near parity at 0.98x with the largest bitcoin reserve of 30,823 BTC. During the strong summer market, these firms traded at substantial premiums.

The drop in valuations has led to questions about whether current prices reflect genuine bargains or concerns regarding balance sheets and management. To regain premium valuations, companies need a positive shift in the bitcoin market, which remains almost flat since January 20, 2024, underwhelming bulls as other assets rise.

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Bitcoin treasury firms have pursued strategies like stock buybacks funded by selling bitcoin or issuing credit. For instance, Empery Digital secured a $100 million credit facility to fund $150 million in repurchases. Yet, the stock declined by 10% after the announcement and is down 60% year-to-date. Sequans Communications (SQNS), holding 3,234 BTC, also started a buyback for 10% of shares but has fallen 27% since.

Some companies deploy parts of their bitcoin for low-risk trading or liquidity strategies to generate small returns, a method also used by bitcoin miner MARA Holdings.

Among top bitcoin treasury firms, Strategy (MSTR) stands out, trading at roughly 1.39x its bitcoin holdings as of the latest check. This premium has decreased from a high of nearly triple bitcoin value in November 2024. Despite more bitcoin and a 60% rally in BTC price, shares declined to $285 from a peak of $543.

An mNAV below 1.0 is not a guaranteed failure. Strategy experienced similar discounts in 2022, rewarding investors who bought in with a nearly tenfold gain since. Whether newer companies facing similar challenges can recover remains uncertain.

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