VanEck Warns Bitcoin Treasury Firms of 46% Stock Drop Risk

VanEck, a prominent investment management firm, has issued a cautionary note to companies that hold Bitcoin as a treasury asset, warning of potential capital erosion. The firm's head of digital assets, Matthew Sigel, highlighted the risks associated with aggressively raising capital to acquire Bitcoin, particularly when the stock price trades near its net asset value (NAV). This strategy, while initially accretive, can become extractive, leading to shareholder dilution and value erosion.

The concern stems from the fact that companies like Metaplanet, which recently hit a $1 billion Bitcoin treasury mark, rely on selling new shares at a premium to fund their Bitcoin purchases. However, if the stock price falls to match the NAV, continued share issuance could dilute shareholders without adding meaningful value. Metaplanet, for instance, is valued by investors as if Bitcoin were trading over $700,000. If the price of Bitcoin falls or the company’s stock slides, the model could break down rapidly.

The risks are not merely theoretical. Semler Scientific, a medical tech company that embraced a 'Bitcoin-first' approach, has seen its stock price drop 46% from the beginning of 2025, despite Bitcoin trading near its all-time high levels. The company now trades at a discount to its Bitcoin holdings, effectively cutting off its ability to raise more capital through share sales. Similarly, KULR, another Bitcoin treasury convert, has seen its multiple-to-NAV slide from above 10 in early January to just above 3, with its stock price down 70% since January.

VanEck's warning comes as the number of companies adopting Bitcoin as a treasury asset has surged, with over 220 firms now following the strategy pioneered by Strategy. While this trend has led to significant stock price gains for some companies, it has also raised concerns about systemic risks to crypto markets and the potential for shareholder dilution. VanEck's caution serves as a reminder that while Bitcoin can be a valuable hedge against currency debasement, it is not without its risks, and companies must carefully manage their capital to avoid erosion.

VanEck's alert parallels past equity dilution incidents within Bitcoin mining sectors, where firms suffered similar capital erosion during bull markets. Lessons emphasize the risks of unchecked equity tactics. By analyzing past trends, experts predict improved outcomes with disciplined capital management. Strategic interventional policies could safeguard against future financial instability.

VanEck, led by Matthew Sigel, issued a detailed warning about potential capital erosion risks for Bitcoin treasury companies. This concerns firms with models focusing on Bitcoin equity, notably impacting company stocks. Sigel illustrated the dangers of equity issuance nearing net asset value (NAV) parity. This strategy risks shareholder dilution, especially affecting firms like Semler Scientific. Immediate strategic amendments are suggested.

Matthew Sigel, Head of Digital Assets Research, VanEck, "If the stock trades at or near NAV (net asset value), continued equity issuance can dilute rather than create value, which would lead to capital erosion rather than formation."

The warning impacts stock valuation and market operations for Bitcoin treasury firms. Share dilution could devalue stocks, making strategic buybacks crucial for maintaining equity value. Financial implications extend to broader Bitcoin markets. Increased transparency and strategic coherence are emphasized to counter potential adverse effects, preserving shareholder interests.