As bitcoin tax companies continue to struggle with declining share prices and rapidly slowing bitcoin accumulation in a tighter market, many are now trading below a 1x multiple of their net asset value (mNAV).
In other words, their market capitalization has fallen below the value of their bitcoin holdings for these “pure play” financial holders (ie excluding miners such as MARA Holdings and broader crypto platforms such as Bullish).
Semler Scientific (SMLR) began its bitcoin treasury strategy in mid-2024 and accumulated over 5,000 BTC. Despite that, the share price now trades roughly at the level it was when the company began its bitcoin journey, around $24 per share, which now gives the company an mNAV of just 0.80x.
While Semler is currently in the process of being acquired by relative newcomer Strive (ASST), the buyer also faces its own challenges.
A roughly 90% drop in Strive’s share price since the completion of a SPAC merger just over a month ago has left ASST’s valuation at only about 50% of the value of the 5,885 bitcoin on the balance sheet.
This is also the case for another recently closed SPAC, KindlyMD ( NAKA ), the 19th largest publicly traded bitcoin holding company, which holds 5,765 BTC and trades at just 0.50x mNAV – a market cap of about $300 million and bitcoin holdings worth about $631 million. The company has $250 million in outstanding convertible debt, which may partly explain the significant discount.
While these are just a few notable examples, the valuations are pretty much the same across the board for these pure bitcoin treasury companies.
Other notable names are also trading below their NAV according to BitcoinQuant data: Capital B (ACPB) at 0.75x (holding 2,818 BTC), The Smarter Web Company (SWC) at 0.72x (holding 2,660 BTC), H100 Group (GS9) at 0.88x (holding 1,350 BTC), and Metaplanet at 1,350 0.98x (holding 30,823 BTC).
The same companies traded at significant premiums during the summer bull market. Since then, investor sentiment has shifted sharply from optimism to caution to the current state of complete despair.
The discounts now raise an important question: do they represent real value, or does the market reflect broader uncertainty about these companies’ balance sheets and performance?
What can finance companies do to get back to a premium?
The sentiment needs to change, and that will likely require a stronger bitcoin market.
Bitcoin – while higher for the year – is now at about the same level it was on January 20, the day of President Trump’s inauguration. One aspect has been particularly frustrating for bulls: bitcoin has done little this year, while stocks and precious metals continued to rise almost daily.
Although controlling macroeconomic events is challenging, bitcoin finance companies can consider several strategies to mitigate the discount.
One option is to buy back their shares, which can be financed either by selling some bitcoin or issuing credit. The latter, however, largely depends on a company’s ability to secure favorable terms and generate enough income to service new debt.
An example of this is Empery Digital, which has announced a $100 million credit facility to fund $150 million in share buybacks. Since that announcement, however, the stock has fallen 10%, resulting in a 60% year-to-date loss. In addition, Sequans Communications (SQNS), which holds 3,234 BTC, recently announced an American Depositary Share (ADS) buyback program representing 10% of its outstanding shares, which authorizes the buyback of up to 1.57 million ADSs. It is also down 27% since this announcement.
Another approach is to use their bitcoin by deploying a portion of their holdings in low-return trading or liquidity strategies that generate modest single-digit returns. This is similar to what a bitcoin miner who also buys BTC on the open market, MARA Holdings (MARA), has started doing.
Strategy: the last one standing
Among the top 20 public bitcoin holding companies, Michael Saylor’s strategy (MSTR) now stands alone in trading at a premium to his BTC stack.
At the last check, the company’s mNAV was approx. 1.39x. However, this has been quickly narrowed. At Strategy’s record high share price of $543 in November 2024, it traded for nearly three times the value of its bitcoin.
Now, about a year later, and with not only a lot more bitcoin on the balance sheet, but also with a 60% increase in the BTC price, MSTR shares have fallen to $285.
It is worth noting that an mNAV below 1.0 is not necessarily a death sentence. Even Strategy saw a similar discount during the downturn of 2022. Those who bought in then were rewarded with exceptional returns – MSTR is almost 10x higher since then, even with the recent drop in share prices.
Whether newer entrants, now grappling with challenges similar to those MSTR faced in 2022, can also stage a recovery remains to be seen.
