A quarter of Bitcoin companies are worth less than their reserves. What does this mean?
Analysts have noted a critical decline in the performance of companies buying Bitcoin and other cryptocurrencies as reserves. How will this impact demand for crypto assets? 
“RBC-Crypto” does not provide investment advice, the material is published for informational purposes only. Cryptocurrency is a volatile asset that can lead to financial losses.
According to The Block, citing K33 analysts, approximately a quarter of public companies with Bitcoin on their balance sheets trade at a discount to the value of their cryptocurrency holdings. This limits their ability to raise capital for Bitcoin through share issuance, as additional shares dilute investors' stakes and become ineffective.
The sharpest decline was seen in NAKA, the combined entity of KindlyMD and Nakamoto, managed by David Bailly, Donald Trump's former cryptocurrency advisor. Since its peak, its market capitalization has fallen by 96%, and its multiple to bitcoin reserves (mNAV) has fallen from 75 to 0.7.
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Twenty-One, backed by Tether, also has an mNAV below one. Even Michael Saylor's Strategy has seen its mNAV drop to 1.26, its lowest since March 2024.
The average mNAV among all publicly traded Bitcoin companies has fallen from 3.76 in April to 2.8. However, the distribution is uneven: smaller companies often have market caps below the price of Bitcoin, while the largest companies still trade at a premium.
In September, the average daily Bitcoin purchase volume by public companies was 1,428 BTC, the lowest level since May. The overall market picture suggests that retail investors and Bitcoin ETFs, rather than corporate buyers, will increasingly drive market demand, according to K33.
Analysts at the British bank Standard Chartered also noted in their research that the boom in companies accumulating cryptocurrencies as reserves is beginning to wane.
Other cryptocurrencies
The total Bitcoin holdings of such companies exceeded 1 million coins—more than $117 billion, or 4.8% of the Bitcoin supply, according to Bitcointreasuries. The K33 report examines companies that purchase only Bitcoin. However, organizations that purchase other cryptocurrencies exhibit similar dynamics.
For example, among the top six largest Ethereum (ETH) holders, only two companies have an mNAV greater than 1. Tom Lee's Bitmine, the largest Ether holder with $9.7 billion in ETH, has a multiplier of 1.21. SharpLink, the next largest, has a multiplier of 0.94, holding $3.8 billion in ETH. The Ether Machine, with $2.2 billion in assets, has an mNAV of 0.07, according to StrategicETHreserve. Bit Digital has a valuation of 1.76, with a balance of $540 million, while ETHZilla, with $460 million in assets, and BTCS, with $315 million, have a multiplier of 0.73.
Source: cryptonews.net
