An analyst from one of the biggest asset managers in crypto is warning Bitcoin treasury companies that they need to pay attention to the ratio of their shares compared to their BTC net asset values (NAV).
Matthew Sigel, the head of digital assets research at VanEck, says that no public BTC treasury companies have traded below their Bitcoin NAVs for a sustained period.
However, Sigel notes that one company, the US medical tech firm Semler Scientific, is approaching parity.
“As some of these companies raise capital through large at-the-market (ATM) programs to buy BTC, a risk is emerging: if the stock trades at or near NAV, continued equity issuance can dilute rather than create value.
That is not capital formation. It is erosion.
Companies pursuing a Bitcoin treasury strategy should adopt safeguards now, while premiums still exist. Some ideas:
- Announce pause to ATM issuance if the stock trades below 0.95 times NAV for 10 or more trading days.
- Prioritize buybacks when BTC appreciates, but the equity fails to reflect that value.
- Launch a strategic review if NAV discount persists. That might include a merger, spinoff, or sunset of the BTC strategy.”
Sigel also argues that executive compensation should align with NAV per share growth, not with total share count or size of the Bitcoin position.
“We’ve seen this movie before with the miners: persistent issuance and outsized executive pay. No need for a sequel.
- Once you are trading at NAV, shareholder dilution is no longer strategic. It is extractive.
- Boards and shareholders should act with discipline now, while they still have the benefit of optionality.”
Last week, top pseudonymous trader DonAlt warned that he thinks Bitcoin treasury companies will be the source of massive selling pressure in the next bear market.
“Bitcoin treasury companies… will be the reason for the next bear market being as violent as prior bear markets, and no one can convince me otherwise.
Good Ponzi while they’re going though so keep going.”
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