Bitcoin Treasury Model Faces Grayscale-Style Discount Warning

Bitcoin treasury companies are increasingly trading at a discount to the net asset value of their holdings, with nearly 40% of the top 100 firms affected. This shift marks a departure from the earlier years of 2025, when the sector enjoyed significant premiums. Analysts warn that the current situation is unsustainable and structurally similar to the Grayscale Bitcoin Trust's 2020 collapse.

The valuation pressure has intensified as equity issuance under these conditions destroys shareholder value. The model that allowed companies to raise capital and purchase additional Bitcoin without diluting shareholders is now broken. This development signals a potential end to the premium era for Bitcoin treasuries according to financial reports.

The discount is not just a statistical anomaly. It has tangible consequences for the companies' ability to expand and raise capital. When shares trade below NAV, issuing new stock to buy more Bitcoin leads to dilution and further value destruction. This dynamic could create a negative feedback loop as research shows.

Why Did This Happen?

The initial hype around Bitcoin treasuries has waned, with investors no longer willing to pay premiums for exposure. In the first three quarters of 2025, the model allowed firms to issue new stock, use the proceeds to buy more Bitcoin, and repeat the cycle without diluting shareholders. This dynamic collapsed in October 2025 according to market analysis.

Analysts point to the Grayscale analogy to explain the current discount. In 2020, GBTC traded at a 40% premium because it was the only regulated way for institutions to access Bitcoin. When spot ETFs entered the market, the premium collapsed to a 50% discount. A similar scenario is now playing out in the Bitcoin treasury sector.

How Did Markets React?

The market reaction has been mixed. Only one Bitcoin treasury company, The Blockchain Group, outperformed the S&P 500 in 2025. Meanwhile, 60% of Bitcoin treasuries spent more on Bitcoin than its current value, highlighting the growing inefficiency in the model according to Seeking Alpha data.

Investor sentiment has also been affected. Strategy, one of the sector's pioneers, now trades at a 17% discount to its Bitcoin holdings. This is a stark reversal from the previous year, when it traded at more than double its Bitcoin value according to financial analysis.

What Are Analysts Watching Next?

Market observers are closely monitoring the potential for consolidation and M&A activity. As smaller companies trade at significant discounts, they become acquisition targets for larger players. This trend was already visible in September 2025, when Strive acquired Semler Scientific in an all-stock transaction according to financial reports.

The structural issues in the sector are not just about valuations. They also involve the ability to raise capital. Companies trading below 1.0x mNAV cannot issue stock to buy more Bitcoin without destroying value for existing shareholders. This dynamic has already led to a reevaluation of growth strategies and a focus on market stability as financial analysis indicates.

Analysts are also watching for regulatory developments. The Federal Reserve's recent liquidity measures have eased short-term funding stress, but the long-term sustainability of the Bitcoin treasury model remains uncertain. The sector's dependence on equity premiums has decreased, forcing companies to revise their strategies according to market analysts.

In summary, the Bitcoin treasury model is at a crossroads. With nearly 40% of major firms trading below NAV, the risk of a Grayscale-style collapse looms large. Investors are advised to monitor valuations closely and be prepared for potential consolidation and strategic realignments according to market intelligence.