Bitcoin Treasury Stocks Tumble as mNAV Risks Spark Investor Concerns

Crypto-related stocks saw steep losses Friday, with bitcoin treasury firms taking the brunt despite only a modest dip in bitcoin's price. Shares of MicroStrategy (MSTR) and Semler Scientific (SMLR) both dropped about 6%, while Japan-listed Metaplanet plunged 24%. Notably, MSTR shares, trading around $376, are down over 30% from their late-2024 highs—even as bitcoin recently hit a new all-time high near $109,000.

This disconnect has reignited debate over the sustainability of bitcoin-heavy treasury strategies, particularly those led by MicroStrategy's Michael Saylor. Critics, including prominent crypto voices on X (formerly Twitter), argue that these companies rely heavily on a financial engineering metric called mNAV—market cap relative to net asset value, primarily measured by bitcoin holdings. As long as mNAV stays above 1.0, firms can raise capital at a premium and buy more bitcoin. But if mNAV falls below 1.0, the company’s valuation drops below its bitcoin reserves, threatening its ability to raise funds and meet obligations on instruments like convertible debt or preferred shares.

This dynamic has drawn comparisons to Grayscale’s GBTC, which traded at a large premium during past bull markets. Once the premium turned into a deep discount, it triggered a series of collapses from Three Arrows Capital to FTX, dragging bitcoin down to $15,000 from $69,000.

Still, MicroStrategy bulls defend the model. Blockstream CEO Adam Back noted that if mNAV dips, firms could sell bitcoin to repurchase shares, increasing BTC per share—a move that could ultimately benefit investors.

As the market continues to evolve, attention remains focused on how long these leveraged bitcoin strategies can hold before potential cracks emerge.