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Challenges Faced by Bitcoin Treasury Companies Amid Decreased Volatility
Bitcoin (BTC) treasury companies are encountering significant hurdles as their market premium over actual BTC holdings diminishes. This is largely due to reduced volatility and a marked decline in new acquisitions. Monthly BTC purchases by these companies have plummeted by 97% since November 2024, highlighting a cautious market sentiment. Recent insights from CryptoQuant underline the urgency for a strategic pivot.
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Impacts of Diminished Bitcoin Volatility on Treasury Value
Bitcoin treasuries typically trade at a premium, meaning their market valuation surpasses the intrinsic value of the BTC they possess. Investors anticipate these companies will expand their holdings, leverage volatility, and offer secure exposure to Bitcoin. Consequently, the market net asset value (mNAV) usually exceeds 1. However, Julio Moreno, CryptoQuant’s Head of Research, notes that Bitcoin’s annualized volatility has hit multi-year lows. This decline removes a crucial factor that supported the premium, as treasuries now find fewer opportunities to capitalize on price fluctuations and justify valuations beyond their BTC holdings.
Analysis of market data for Strategy, the largest corporate BTC holder, reveals that volatility spikes previously led to periods when the mNAV surged above 2.0, particularly in early 2021 and mid-2024. During these periods, treasury companies could monetize volatility by raising capital at a premium and swiftly acquiring BTC. Currently, however, volatility is well below 0.4 log daily return annualized, its lowest since 2020. This decrease aligns with a drop in mNAV, now approaching 1.25, indicating investors no longer perceive treasury companies as offering significant leverage compared to direct Bitcoin holdings.
Declining Demand Exacerbates Treasury Challenges
In the absence of price swings to fuel growth, Bitcoin treasury firms struggle to increase their holdings in a way that justifies a premium valuation. While there were sporadic buying surges in late 2024 and early 2025, overall activity remains subdued. Consequently, Strategy’s mNAV has been on a downward trend since early 2025, despite BTC trading at relatively high prices compared to recent years. Data indicates that when treasuries make aggressive purchases, investor enthusiasm elevates mNAV, reinforcing the cycle of premium issuance and BTC accumulation. Julio Moreno suggests that a sustained mNAV premium requires a resurgence in BTC volatility and renewed large-scale purchases. Until such conditions materialize, treasury companies may find it challenging to justify valuations beyond their Bitcoin net asset value, prompting investors to consider direct Bitcoin investments instead of corporate strategies.
As of now, Bitcoin is trading at $115,810, marking a 4.72% increase over the past week.
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