Premiums collapse push Bitcoin treasury firms into a Darwinian phase, Galaxy says
Bitcoin treasury firms are entering a “Darwinian phase” as equity premiums collapse into discounts and leverage amplifies losses, according to a new Galaxy Research note. The report argues the trade has reached a natural limit
With share prices below Bitcoin net asset value (NAV), issuance no longer drives BTC-per-share growth turning the erstwhile upside flywheel into a drag. The Bitcoin treasury firms Darwinian phase is unfolding as the Oct. 10 deleveraging drained liquidity and risk appetite across crypto markets.
What changed
Galaxy says the model worked only while equities traded above BTC NAV; once premiums tightened, the loop reversed. With BTC falling from ~$126k in October to lows near ~$80k before rebounding, DAT stocks severely underperformed spot BTC and now frequently trade at discounts to holdings. Galaxy
DAT stocks flip negative versus Bitcoin
Drawdowns at DAT names (Strategy/MSTR, Metaplanet/3350.T, Semler/SMLR, Nakamoto/NAKA) far exceed BTC’s ~30% pullback.
In extreme cases, NAKA fell more than 98% from its peak—“memecoin-like” price action, Galaxy notes.
Metaplanet and Nakamoto show average BTC costs above ~$107k, leaving them deep in the red at recent market levels.
The mechanics: leverage turns into downside
DAT equities combine operational, financial, and issuance leverage. When BTC slips, BTC-per-share falls, premiums compress, and ATM/PIPE issuance becomes dilutive rather than accretive stagnating growth and adding downside beta versus spot BTC.
Equity issuance flywheel reverses after Oct. 10
The Oct. 10 deleveraging purged futures open interest and weakened spot depth, accelerating the premium collapse across DAT names.
Galaxy’s scenarios from here
Base case: premiums stay compressed.
Expect flat or negative premiums, muted BTC-per-share growth, and levered downside versus spot BTC.
Consolidation risk
Firms that issued heavily at high premiums, bought BTC near cycle tops, or layered on debt could face restructurings or M&A.
Recovery optionality
If BTC posts new ATHs, better-capitalized firms that preserved liquidity could regain modest premiums.
Liquidity buffers emerge
Galaxy highlights Strategy’s move to amass a ~$1.44bn cash reserve (funded via stock sales) to secure dividends and debt service signaling a pivot from “all-BTC” toward liquidity management while premiums are compressed.
Market context and external views
Coverage beyond Galaxy echoes tightening conditions: broader DAT cohorts shifting strategies, trading below NAV, and contemplating buybacks amid dwindling risk appetite and share dilution pressures.
Company snapshots
Metaplanet (3350.T)
Swung from hundreds of millions in unrealized gains at cycle highs to sizable unrealized losses as prices retreated.
Nakamoto (NAKA)
Among the sharpest decliners; recent reports noted 90–98% drawdowns amid dilution and sentiment fatigue.
Context & Analysis
The DAT trade looks path-dependent. Survival likely hinges on balance-sheet discipline (cash buffers, prudent issuance) and entry timing. If BTC regains highs, some premiums could return but boards will be judged on this stress test.
Conclusion
The first phase of the treasury-as-a-strategy trend has ended, marking a shift in how companies approach Bitcoin in their balance sheets. Early adopters focused mainly on accumulating BTC as a strategic reserve, benefiting from rising market cycles and narrative momentum. But that simple accumulation phase is no longer enough.
We’ve now entered a more Darwinian stage where only firms with disciplined capital allocation and strong liquidity management will thrive. Survival will depend on balancing Bitcoin exposure with responsible financial planning, stress-testing treasury models, and ensuring enough liquidity to operate through volatility. Smart strategy not just stacking BTC will define the next leaders.
FAQs
Q : What triggered the Bitcoin treasury firms’ Darwinian phase?
A : Galaxy cites the Oct. 10 deleveraging and the collapse of equity premiums to BTC NAV.
Q : Are DAT stocks still a leveraged bet on BTC?
A : Yes but leverage currently magnifies downside due to discounts and dilution.
Q : Which firms were hit hardest?
A : Nakamoto (NAKA) shows one of the steepest drawdowns; Metaplanet’s average cost sits above ~$107k.
Q : Can premiums return?
A : Possibly, if BTC reaches new ATHs and risk appetite improves.
Q : How do I evaluate a DAT stock’s value?
A : Compare market cap to BTC NAV, review cost basis, dilution, and liquidity buffers.
Q : Did Strategy shore up liquidity?
A : Galaxy points to a ~$1.44bn cash reserve funded via equity sales to cover dividends and debt.
Q : Is this unique to Bitcoin-focused treasuries?
A : ETH/SOL-focused firms may benefit from staking/DeFi yields, making their dynamics different.
Facts
Event
Equity premiums for DAT firms collapsed to discounts, ushering in a “Darwinian phase.”Date/Time
2025-12-06T18:00:00+05:00Entities
Galaxy Research; Strategy (MSTR); Metaplanet (3350.T); Semler Scientific (SMLR); Nakamoto (NAKA).Figures
BTC range: ~$126k (Oct high) → ~$80k low; NAKA drawdown >98%; average BTC costs >$107k at Metaplanet/NAKA (per Galaxy).Quotes
“The same financial engineering that amplified upside has magnified downside.” Galaxy Research.Sources
Galaxy Research; Cointelegraph; Reuters (context).