Falling Premiums in Crypto Treasury Firms: A Call for Strategic Buybacks and Valuation Realignment

The crypto treasury sector is undergoing a seismic shift. As of Q3 2025, premiums for digital asset treasury (DAT) firms—companies that hold significant Bitcoin (BTC) reserves—have compressed sharply, signaling structural fragility and mounting supply-side pressures. This trend, highlighted by NYDIG and corroborated by on-chain analytics from CryptoQuant, reflects a market grappling with regulatory uncertainty, profit-taking, and diverging institutional strategies. For investors and corporate treasurers alike, the narrowing premiums underscore an urgent need for strategic buybacks and valuation realignment to stabilize share prices and restore confidence.

Structural Shifts and Premium Compression

The compression of DAT premiums is not merely a function of Bitcoin’s price action but a symptom of deeper market dynamics. NYDIG’s Q3 2025 report notes that the gap between stock prices and net asset values (NAVs) for firms like Metaplanet and Strategy has narrowed despite BTC hitting all-time highs [6]. This dislocation arises from investor anxiety over upcoming supply unlocks (e.g., Bitcoin halvings, corporate share issuances) and a lack of differentiation in treasury strategies across DATs. For instance, Strategy’s average Bitcoin purchase size plummeted by 86% in August 2025 compared to early 2025 levels, reflecting liquidity constraints and cautious buying behavior [2].

Meanwhile, CryptoQuant’s granular data reveals a surge in short-term selling pressure, with 87,000 BTC liquidated by loss sellers in August alone [3]. This outflow, coupled with institutional players like Galaxy Digital transferring 2,500 BTC to exchanges, amplifies downward pressure on premiums. The result? A market where DATs are increasingly viewed as arbitrage vehicles rather than long-term value generators.

Case Studies: Buybacks as a Defense Mechanism

Firms like Twenty One Capital and Empery Digital are illustrative of the sector’s pivot toward capital recycling. Twenty One Capital, operating under Brookfield Business Partners (BBU), executed a $160 million share repurchase program in Q2 2025, leveraging its 8.6% discount to NAV to return value to unitholders [1]. This move aligns with broader Brookfield strategies to accelerate buybacks, reduce debt, and reinvest in growth, all while navigating a market where DAT premiums are under siege.

Similarly, Empery Digital has emerged as an outlier in the sector, trading at a 24% discount to NAV while maintaining an active buyback program [6]. This strategy contrasts sharply with peers like Strategy, which has prioritized cash preservation over aggressive repurchases, despite its holdings of 637,000 BTC (76% of the sector’s total) [2]. Empery’s approach highlights the potential for disciplined buybacks to stabilize valuations in a market where premiums are collapsing due to oversupply and profit-taking.

The Role of Institutional Demand and Regulatory Tailwinds

While the sector faces headwinds, macroeconomic factors offer a counterbalance. The approval of Ethereum and Solana ETFs in Q3 2025 has injected $5 billion into spot BTC ETFs, with institutions like MicroStrategy and CleanSpark expanding their treasuries to $1 billion+ in BTC holdings [4]. The U.S. Federal Reserve’s pivot toward rate cuts and global regulatory harmonization (e.g., Hong Kong, Singapore) further bolster institutional demand, as reflected in the Coinbase Premium Index’s 4-month high [3].

However, these tailwinds are not enough to offset the structural risks. As NYDIG warns, the sector is likely to face a “bumpy ride” as outstanding mergers and equity financings trigger a wave of new share sales [6]. For DATs, the imperative is clear: without aggressive buybacks and strategic realignment, premiums will continue to erode, undermining both shareholder value and institutional confidence.

Investor Implications and Strategic Recommendations

For investors, the narrowing premiums signal a critical inflection point. While Bitcoin’s long-term fundamentals remain intact, the immediate risk lies in liquidity crunches and overissuance by DATs. Strategic buybacks—particularly by firms with strong cash reserves and undervalued NAVs—can mitigate these risks. For example, TON Strategy’s $250 million buyback plan in Q3 2025 demonstrates how capital recycling can reinforce investor confidence amid volatility [6].

Corporate treasurers, meanwhile, must prioritize transparency in their treasury strategies. Diversifying asset allocations, optimizing share issuance, and aligning buyback programs with NAV premiums are essential steps to navigate the current environment. As CryptoQuant notes, the market is in a “healthy consolidation phase,” but without proactive measures, the sector risks a deeper correction [5].

Conclusion

The crypto treasury sector stands at a crossroads. Falling premiums are not a temporary blip but a structural signal of market stress. By adopting aggressive buybacks, realigning valuations, and leveraging regulatory tailwinds, firms like Strategy, Twenty One Capital, and Empery Digital can stabilize their premiums and position themselves for long-term resilience. For investors, the message is clear: act now to capitalize on undervalued opportunities before the next wave of supply-side pressures reshapes the landscape.

Source:
[1] BBU - Q2 2025 Letter to Unitholders [https://bbu.brookfield.com/regulatory-filings/letters-to-unitholders/bbu-q2-2025-letter-unitholders]
[2] Crypto treasuries set for 'bumpy ride' as premiums narrow [https://cointelegraph.com/news/crypto-treasuries-bumpy-ride-premium-nav-narrow-nydig]
[3] Bargain Hunters Emerge as Bitcoin Remains Under Pressure [https://www.coindesk.com/daybook-us/2025/08/19/bargain-hunters-emerge-as-bitcoin-remains-under-pressure-crypto-daybook-americas]
[4] Crypto Market Macro Research Report: Altseason Signals ... [https://htxofficial.medium.com/crypto-market-macro-research-report-altseason-signals-emerge-institutions-ignite-a-selective-bull-20d280d1f4a4]
[5] CryptoQuant Analysis Points to a Powerful BTC Price Outlook [https://www.bitget.com/news/detail/12560604847134]
[6] Unlocking the Future of Digital Wealth: Why AIXA Miner Is the Leading Cloud Mining Platform in 2025 [https://coincentral.com/unlocking-the-future-of-digital-wealth-why-aixa-miner-is-the-leading-cloud-mining-platform-in-2025/]