The Decline of Digital Asset Treasuries: Lessons from Prenetics' Shift

The recent strategic pivot by Prenetics, a health sciences company backed by global icon David Beckham, has reignited debates about the sustainability of digital asset treasury (DAT) strategies in bear markets. By halting its Bitcoin treasury purchases in December 2025 and redirecting capital to its IM8 nutritional supplement brand, Prenetics exemplifies a broader industry reckoning with the risks of volatile crypto assets amid economic uncertainty. This shift, while specific to Prenetics, reflects systemic challenges facing DATs as market-adjusted net asset values (mNAVs) contract and leverage-driven models face scrutiny according to analysis.

A Bear Market Test for Digital Treasuries

The 2025 bear market, marked by a 23% decline in the global crypto market cap from $4.3 trillion to $3.2 trillion, has exposed vulnerabilities in DAT business models. Companies that once leveraged debt and equity to scale Bitcoin holdings-such as Strategy (MSTR), which controls 82% of the 725k BTC held by Bitcoin Treasury Companies (BTC-TCs)-now face pressure to defend their capital structures according to KeyRock analysis. Prenetics' decision to pause its 1 BTC-per-day acquisition program underscores the tension between long-term value preservation and short-term liquidity constraints. According to a Bloomberg report, the firm cited the need to "protect long-term shareholder value" amid declining crypto prices a rationale echoed by other DATs reevaluating their exposure.

Leverage, Liquidity, and the Risk of Overreach

The sustainability of DATs hinges on their ability to balance growth with financial discipline. Prenetics' hybrid model-combining genomic operations with Bitcoin accumulation-was initially praised for its strategic flexibility according to cryptorank. However, the company's reliance on a dual-engine approach also introduced valuation complexity, particularly as crypto prices dipped. This mirrors broader industry trends: firms like BitMine Immersion Technologies (BMNR) and The Ether Machine (ETHM) have used aggressive leverage to expand holdings, but such strategies amplify risk during downturns according to financial analysis. For instance, BMNR's $963 million ETH purchase during a selloff highlights the double-edged nature of market timing in leveraged models.

Experts warn that declining mNAVs could force DATs to sell assets to service debt, potentially exacerbating market volatility. A KeyRock analysis notes that companies with high leverage and low cash flow are particularly vulnerable, as they depend on at-the-market (ATM) equity issuances to meet obligations according to KeyRock analysis. Prenetics' pivot to IM8, which generated $100 million in annualized recurring revenue within 11 months, suggests a recalibration toward more predictable cash flows-a move that aligns with investor demands for stability.

Case Studies: Divergent Paths in a Downturn

The 2025 bear market has revealed stark contrasts in DAT strategies. Strategy's $2 billion bond issuance and novel STRC perpetual preferred stock illustrate a high-risk, high-reward approach that has driven a 1,204% share price increase since 2020 according to financial reports. Conversely, Metaplanet's rapid accumulation of 30,823 BTC by December 2025 demonstrates the potential for rapid scaling in a concentrated market. Yet, these successes contrast with firms like Sequans, criticized for inconsistent execution and lack of conviction during the year, which eroded investor trust.

Prenetics' decision to retain its existing 510 BTC holdings while ceasing new purchases reflects a middle path. By prioritizing its healthcare business, the company avoids the reputational risks of overleveraging while maintaining a crypto stake that could appreciate in a future bull cycle. This approach aligns with the "fortress of value" philosophy outlined in Prenetics' Bitcoin Treasury Engine whitepaper which frames Bitcoin as a hedge against inflation rather than a speculative play.

Lessons for the Future

The Prenetics case offers critical insights for DATs navigating bear markets. First, it underscores the importance of disciplined capital allocation. While Bitcoin's 3.64% market share of total supply suggests enduring institutional interest, DATs must avoid overreliance on leverage to fund acquisitions. Second, the shift highlights the need for diversified revenue streams. Prenetics' IM8 brand, with its rapid revenue growth, provides a counterbalance to crypto volatility-a model that could inspire other DATs to integrate complementary businesses.

Regulatory developments, such as the GENIUS Act's stablecoin framework signal a maturing market, also signal a maturing market. However, DATs must adapt to evolving compliance requirements, particularly around custody and fair-value accounting according to industry analysis. As JPMorgan and other traditional institutions deepen their crypto engagement according to financial reports, DATs that prioritize operational integrity-such as robust custodian partnerships and transparent risk disclosures-will likely outperform.

Conclusion

Prenetics' pivot from Bitcoin to healthcare is not a rejection of digital assets but a recalibration in response to market realities. The company's experience, alongside broader industry trends, illustrates that DATs must balance innovation with prudence. While Bitcoin's role as a store of value remains compelling, the bear market of 2025 has exposed the fragility of leveraged, speculative models. For DATs to thrive, they must align their strategies with long-term goals, diversify revenue sources, and maintain disciplined capital structures. In doing so, they can navigate volatility while preserving the core promise of digital treasuries: creating resilient, inflation-protected value for shareholders.