Bitcoin Treasury Firms Face Sustainability Concerns Amid Market Downturn Fears

Corporate Bitcoin treasury firms have emerged as a significant trend in recent years, with companies like Strategy adopting an aggressive approach to Bitcoin ownership. However, market experts have raised concerns about the sustainability of this strategy, arguing that it lacks a clear purpose and may not withstand the test of time. Analysts warn that many Bitcoin treasury companies rely heavily on new investors for revenue generation and use complex financial products to obscure the true source of their yield. This approach could lead to a collapse for firms that mimic the Bitcoin treasury model during a prolonged Bitcoin downturn. Experts advise caution, as the next Bitcoin bear market could wipe out equity in these companies.

Glassnode lead analyst James Check recently expressed concerns about the current Bitcoin holding model, suggesting that the days of easy gains may be over for new firms entering the industry. He emphasized the importance of adopting a sustainable product and approach to sustain accumulation. Check noted that new entrants are already facing difficulties in attracting capital inflow, as most investors favor early Bitcoin treasury firms. Startup BTC treasury firms primarily attract retail speculators with limited funds who are seeking short-term gains. Check also acknowledged the surge in corporate BTC accumulation in 2025, with 51 new Bitcoin treasury firms debuting in the first half of the year, 14 more than in 2024. Despite these challenges, Check remains bullish on Bitcoin’s long-term price outlook.

Check explained that the appeal of firms like Strategy is greater than that of newer entrants in the BTC treasury space. He agreed with Taproot Wizards co-founder Udi Wizardheimer’s comments that some firms are leveraging the Bitcoin treasury strategy as a quick-gain scheme without considering its long-term objectives. Bitcoin Magazine reporter Emil Sandstedt also raised concerns, stating that “Bitcoin Treasury Companies are bubbles” and that they operate like Ponzi schemes. Sandstedt argued that Strategy creates an illusion of growth by issuing massive amounts of shares and complex financial products to buy more Bitcoin. Several firms, including MARA Holdings and Metaplanet, have adopted Strategy’s aggressive BTC stashing model. However, Sandstedt believes that failing companies have copied this model to boost their stock prices and that smart money is exiting the industry.

Wizardheimer admitted that new firms are simply raising capital without a clear sense of purpose. He believes that these new players are chasing quick profits without a deep understanding of the industry and will need time to fully understand the space for a better business approach. He also suggested that weaker companies might be acquired by stronger ones at discounted prices and that this trend could continue for some time before eventually slowing down. Venture capital firm Breed has echoed these doubts, suggesting that only a few Bitcoin treasuries will hold up over time when an inevitable “death spiral” engulfs firms that trade close to net asset value (NAV).

Despite these concerns, some market experts believe that Bitcoin treasuries could diversify in the future, potentially exploring attainable income generation options such as lending or yield staking. Such a robust approach could help these firms better guard against volatility in the event of a market downturn. However, these projections are still in their early days and remain largely speculative. The overall sentiment among experts is one of caution, with a call for more sustainable and purposeful strategies in the Bitcoin treasury space.