Is crypto winter coming? It is already more than deposited for bitcoin treasury companies (BTCTC).
Aiming to recreate the once-in-a-generation success of Michael Saylor’s MicroStrategy (MSTR) and perhaps benefit from a US regulatory regime willing to look the other way on questionable public offerings, a wave of crypto-asset treasury companies have been slated to go public in 2025.
The result has been massive investor losses almost across the board. And while the jump in the price of bitcoin over the past 11 days (yes, it wasn’t until Monday October 3rd when BTC peaked above $126,000) can be blamed for some of the carnage, BTCTC share prices tumbled well before that.
Checking a small group of BTCTCs, losses over the past three months range from “only” 38% in the case of the strategy to 94% for KindlyMD (NAKA).
‘Still Boys’
When his TerraUSD algorithmic stablecoin began to decouple from the dollar in May 2022, Do Kwon famously tweeted: “Deploy more capital – steady boys.” Within days, TerraUSD, which had previously had a market cap of around $50 billion, was worthless.
The social media post has become a meme for the crypto community whenever things start to look questionable for the markets or other companies.
This is not to imply any level of comparable volatility or delinquency, or to predict future BTCTCs, but some of the management teams of these firms have recently been busy on social networks to defend their business models.
Simon Gerovich, CEO of Japan’s Metaplanet (MTPLF) – which remains higher since it adopted the BTCTC strategy in 2024 but has seen a 70% share price decline over the past three months – tried to argue on Friday why a shift to issuing preferred shares will provide strong returns for shareholders.
“When bitcoin rises faster than the cost of capital, this difference compounds into greater bitcoin per share, and the benefit accrues to common shareholders,” he said in a post on X.
Tl;dr: Metaplanet investors will benefit if “the number goes up.”
KindlyMD CEO David Bailey — whose 94% stock drop over the past three months has left the stock below $1 and in danger of being delisted by Nasdaq — found it necessary Thursday to refute claims by an X poster that his company had “FTX vibes.”
“There is absolutely no similarity to FTX,” Bailey said. “We are a regulated, registered securities firm that buys and holds bitcoin.” When the CEO of a publicly traded company has to respond to a random s–tposter to say “we’re not FTX,” it’s safe to say the plot may have been lost.
Then there was Strive (ASST) CIO Ben Werkman — whose share price decline has nearly matched NAKA’s and also faces delisting danger — trying to explain the difficulties and a way forward.
“Now the glut is gone and many companies are now in a position with their balance sheets intact to be able to move on to the second phase of the journey,” Werkman said in an extremely lengthy post to X.
“It’s hard to achieve scale, but now many companies have it,” he continued. “The valuation hits what I would consider deep value territory (just based on balance sheets alone), and those are the valuations where many investors will place their bets over the long term.”
Werkman went on to remind that many assumed Saylor’s strategy (then MicroStrategy) would break even in 2022’s crypto winter. Those who faded this assumption were rewarded with astonishing returns. MSTR was trading at around $30 when Do Kwon made his “steady lads” post. Even after their recent decline, shares are still at $290 — or nearly a 10-bagger over the past three and a half years.
Whatever the future may hold for the BTCTCs, one thing is certain: sentiments are anything but positive at the moment. If any of the laggards are to mirror the massive success of the first mover strategy, it may take a lot more than just a rising bitcoin price.
This op-ed is part of CoinDesk’s Bitcoin Treasuries Theme Week, sponsored by Genius Group.
