Publicly traded crypto treasury companies, once seen as a secure gateway to digital assets, are facing a severe crisis. A recent analysis by experts from the global bank Standard Chartered reveals that these firms are performing significantly worse than the cryptocurrencies they hold on their balance sheets, causing growing concern among investors.
The strategy seemed simple: companies that acquire cryptocurrencies like Bitcoin or Ether for their treasury, allowing investors to gain indirect exposure through traditional stocks. However, the hard data shows an alarming reality. Strategy, the largest corporate holder of Bitcoin, has seen its shares fall by about 45% from its November high, while BTC itself has gained 10% over the same period. An even more drastic case is Metaplanet, whose shares have plummeted 78% from their May peak, even though Bitcoin only retreated 2% since then.
Market Saturation and Investor Fear
The phenomenon is not limited to Bitcoin. SharpLink Gaming, a firm with an Ethereum treasury, has lost 87% of its stock market value, while ETH has appreciated by 115%. Similarly, Helius Medical Technologies, with exposure to Solana, saw its shares drop more than 97% year-to-date, a stark contrast to SOL’s 33% correction. This disconnect between stock value and the underlying assets raises serious questions about the model.
According to analysts, the main reason behind this trend is market saturation. The existence of over 140 crypto treasury companies has compressed the multiples on net asset value, eroding the premium that investors were willing to pay. Previously, these stocks were one of the few regulated vehicles to access the crypto market, but the proliferation of direct investment options has diminished their appeal.
The poor performance of these stocks has sown fear in the market. There is a legitimate concern that in a future crypto market downturn, these crypto treasury companies could be forced to massively liquidate their holdings to cover debts, which could accelerate a price drop and worsen the crisis. This possibility adds a layer of systemic risk that did not exist before.
The current situation shows that indirect investment through these entities is not a safe haven. The valuation of these crypto treasury companies seems to be more influenced by stock market panic than by the actual performance of the digital assets they own. Investors must now weigh whether the risk of corporate mismanagement outweighs the benefits of indirect exposure, a dilemma that will define the future of this investment technology.
