- Crypto stocks, especially those holding large Bitcoin reserves, dropped sharply Friday, outpacing bitcoin’s own decline.
- MicroStrategy (MSTR) and Semler Scientific (SMLR) shares each lost around 6%, while Japan’s Metaplanet fell 24%.
- MSTR traded more than 30% below its record high, despite bitcoin reaching new peaks this week.
- Market debates continue over the risks of companies aggressively buying bitcoin using leverage, focusing on the sustainability of their strategies.
- Analysts compared current market behavior to past issues with Grayscale’s GBTC, warning of instability if company valuations fall below their bitcoin holdings.
Crypto-linked stocks saw significant losses on Friday, as companies with large bitcoin holdings led declines in the market. Shares of MicroStrategy (MSTR) and Semler Scientific (SMLR) each dropped about 6%, even though the price of bitcoin itself fell just over 2%. Japan-listed Metaplanet sank 24% during the same period.
As of early Friday afternoon, MSTR was trading at $376—more than 30% under its all-time high from late 2024. This steep drop occurred as bitcoin hit a new record high earlier in the week.
The current price movement comes amid an ongoing debate over the sustainability of bitcoin “treasury” strategies, where companies aggressively buy and hold bitcoin. Critics like the bitcoin-focused social media account lowstrife argue that these approaches use excessive leverage, calling it “the worst thing which has ever happened to bitcoin [and] what bitcoin stands for.” According to lowstrife, the model relies on a metric called mNAV, which compares a company’s market valuation to the value of its bitcoin holdings. If mNAV stays above 1.0, firms can keep raising money and buying more bitcoin because investors are willing to pay a premium. However, if mNAV drops below 1.0, it signals trouble, suggesting the company’s market value is less than its bitcoin assets and making it harder to raise capital or pay out dividends.
This situation echoes the problems faced by Grayscale’s GBTC in 2020 and 2021, when its stock price fluctuated wildly relative to its underlying bitcoin assets. When the premium turned to a discount, it contributed to problems for funds like Three Arrows Capital and helped trigger a major market crash that pushed bitcoin from $69,000 to $15,000.
Castle Island Ventures partner Nic Carter wrote that, “the entire game now — the whole thing — is figuring out how much more BTC these access vehicles will scoop up, and when they will blow up and spit it all back out again,” in response to lowstrife’s concerns. MSTR supporters countered that even if mNAV goes below 1.0, the company could sell bitcoin and buy back shares to increase value per share, as noted by Adam Back, CEO of Blockstream.
✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.
Previous Articles:
- South African Court Rules Crypto Not Covered by Exchange Controls
- BTC Dips From ATH, US Banks Mull Stablecoin, HYPE Hits New High
- Radix Grants Fuel Innovation: RPFS, XRDEGEN, and Liquify Lead
- $24 Million in Crypto Seized From Russian Qakbot Malware Leader
- AI Advances Bring Formal Verification to Bitcoin and Software Security
