Bitcoin Treasury Firms and the Looming Delisting Crisis: Assessing the Sustainability of Corporate Bitcoin Holdings as a Business Model

The corporate Bitcoin treasury model-once hailed as a revolutionary approach to asset allocation-now faces a critical inflection point. As Bitcoin's price has plummeted from ~$126,000 to ~$92,000 in 2025, the financial engineering underpinning these firms has come under intense scrutiny. With over 1 million Bitcoin (nearly 5% of the total supply) held by publicly traded companies according to reports, the sector's viability hinges on whether its business models can withstand prolonged bear markets, regulatory headwinds, and the inherent volatility of crypto assets.

The Three Models: From Pure Play to Strategic Holders

Bitcoin treasury firms operate under three primary models, as outlined by Michael Saylor: Pure Play Issuers, Hybrid Operators, and Strategic Holders according to Michael Saylor.

1. Pure Play Issuers (e.g., Strategy, Metaplanet) treat Bitcoin as their core business, leveraging equity and debt to accumulate more BTC. These firms thrive in low-yield fiat environments by issuing Bitcoin-backed credit or convertible instruments. However, their reliance on continuous capital raising to fund accumulation has become a liability as Bitcoin's price decline has eroded their equity premiums. For instance, Strategy's enterprise value is now only 15% higher than its Bitcoin holdings according to Fortune, a precarious margin that could trigger a liquidity crisis if its multiple-to-net-asset-value (mNAV) ratio drops below 1.

2. Hybrid Operators (e.g., American Bitcoin Corp) balance traditional operations with Bitcoin accumulation. While this model offers diversification, it also creates tension between operational cash flow and speculative BTC exposure. The recent drawdowns have exposed the fragility of this duality, as firms struggle to meet both operational costs and shareholder expectations for Bitcoin growth according to industry analysis.

3. Strategic Holders use Bitcoin as a passive hedge against fiat depreciation. These firms, often small businesses, allocate a median of 10% of their net income to BTC. While less aggressive, this model remains vulnerable to forced sales during liquidity crunches, particularly if Bitcoin's price continues to underperform.

Market Pressures: NAV Discounts and Delisting Risks

The most immediate threat to Bitcoin treasury firms is the collapse of equity premiums. As of late 2025, one in three publicly listed BTC-TCs trades below their market net asset value (mNAV), meaning their stock is worth less than the Bitcoin they hold according to market analysis. This inversion undermines the core premise of these firms: issuing shares at a premium to fund further BTC purchases.

Sequans Communications, a Paris-based chipmaker turned Bitcoin treasury firm, exemplifies the delisting risks. To avoid being delisted from the NYSE, the company announced a 10-to-1 reverse stock split according to market reports. Such moves signal a broader trend: firms trading at NAV discounts are forced to take drastic measures to maintain listing status, often at the expense of investor confidence.

The sustainability of leveraged models is further questioned by the growing unrealized losses. Metaplanet, for example, reported $530 million in unrealized losses by December 2025, reversing earlier gains of $600 million according to research data. These swings highlight the existential risk of holding volatile assets as primary reserves.

Regulatory Uncertainty: A Double-Edged Sword

Regulatory developments in 2025 have added another layer of complexity. The U.S. SEC's approval of in-kind creations for crypto ETPs and its no-action letters for certain tokens indicate a nuanced approach according to policy trackers. However, the agency's enforcement actions-such as the DOJ's $50 million settlement with Roger Ver and a $15 billion forfeiture case against a Cambodian executive-underscore the risks of non-compliance according to legal updates.

The most contentious regulatory proposal comes from MSCI, which seeks to exclude firms with over 50% of assets in digital assets from its global benchmarks according to industry reports. Strategy has vocally opposed this rule, arguing it would create "index whiplash" as Bitcoin price fluctuations force repeated inclusions and exclusions according to Strategy's analysis. This debate reflects a broader tension: while regulators aim to protect investors, their actions risk stifling innovation in a nascent asset class.

The Path Forward: Diversification or Collapse?

The long-term viability of Bitcoin treasury firms depends on their ability to adapt. Some analysts advocate for monetization strategies such as lending or yield staking to generate active returns from BTC holdings according to financial research. However, these approaches introduce new risks, including counterparty exposure and regulatory ambiguity around staking activities according to policy analysis.

Others argue for a return to traditional treasury practices, such as diversifying into stablecoins or gold-backed assets to stabilize NAVs according to business guidance. Yet, this would contradict the core thesis of Bitcoin as a hedge against fiat depreciation.

The Federal Reserve's potential rate cuts in 2026 could provide a lifeline, boosting liquidity and reducing the cost of capital for leveraged firms according to market forecasts. However, this remains speculative, and the sector's survival may ultimately depend on Bitcoin's price recovery.

Conclusion: A Model in Peril

Bitcoin treasury firms have redefined corporate finance by treating crypto as a strategic reserve. Yet, their business models-built on perpetual capital raising and bullish price assumptions-are now under siege. With delisting risks, regulatory scrutiny, and NAV discounts converging, the sector faces a stark choice: evolve or collapse. For investors, the lesson is clear: holding Bitcoin as a corporate asset is not a passive strategy-it's a high-stakes gamble that demands rigorous risk management.