The landscape for Bitcoin treasury stocks is undergoing a significant transformation, with premiums evaporating as on-chain capitulation reaches unprecedented levels. This shift indicates that both leveraged equity investors and spot holders are experiencing substantial losses simultaneously.
According to a recent report from Galaxy Research, the so-called digital asset treasury (DAT) model has hit a critical juncture. The report revisits earlier warnings that this model only remains viable as long as a company”s stock trades above the net asset value of its underlying Bitcoin holdings. In previous months, companies like Strategy, Metaplanet, Semler Scientific, and Nakamoto enjoyed substantial premiums over their Bitcoin assets, enabling them to issue new shares and reinvest the proceeds into additional Bitcoin purchases. This premium structure acted as a liquidity derivative, facilitating growth through share issuance.
However, as the premiums have diminished, the dynamic has flipped. The price of Bitcoin has plummeted from approximately $126,000 in October to a low of $80,000, currently hovering near $92,000. This decline follows a significant deleveraging event in early October that triggered widespread liquidations in futures markets, resulting in reduced open interest and diminished liquidity as the year drew to a close. Galaxy notes that these conditions have led to a more cautious investor sentiment, which has curtailed inflows into cryptocurrency exchange-traded funds.
The repercussions for DAT companies have been stark. With Bitcoin“s decline and a waning risk appetite, the net asset value per share has also dropped, compressing equity premiums. Many of these stocks are now trading at or even below the value of their Bitcoin holdings. This shift means that new stock offerings are likely to dilute existing shareholders instead of providing capital for further Bitcoin acquisitions.
Galaxy”s report emphasizes the dramatic drawdowns experienced by these stocks since their highs in 2025. For instance, Nakamoto”s share price has plummeted more than 98 percent, a stark contrast to the 30 percent decrease in Bitcoin itself. This disparity highlights how equity, issuance, and balance-sheet leverage have amplified losses in a declining market.
Unrealized profit and loss metrics further illustrate this trend. Galaxy points to Metaplanet”s public dashboard, which revealed over $600 million in unrealized Bitcoin profits in early October, now showing approximately $530 million in unrealized losses as of December 1. The report indicates that both Metaplanet and Nakamoto hold Bitcoin at an average cost exceeding $107,000 per coin, resulting in negative unrealized profit and loss figures at current prices.
A comparative analysis of the equity premiums from July to December underscores this rapid compression. In mid-summer, Metaplanet was trading at about 236 percent of its Bitcoin net asset value. Now, premiums for Strategy, Metaplanet, and Semler Scientific have compressed significantly, often nearing zero or even trading at a discount to their underlying holdings. Galaxy concludes that the initial phase of the Bitcoin treasury trade has likely concluded, as the model reliant on premium stock issuance has reached its limits. Once shares trade at or below net asset value, new issuances become a burden rather than a growth catalyst.
Simultaneously, the capitulation metric for Bitcoin has surged to an all-time high, indicating the most intense wave of forced selling pressure recorded in this market cycle. Data shared by CryptoGoos shows a sharp spike in the capitulation line as prices decline, reflecting heavy realized losses as investors exit their positions in a declining market. This trend has intensified in recent weeks, marking the steepest increase in over a year.
The current spike in capitulation metrics suggests that both long-term and short-term holders are realizing losses simultaneously, contributing to a volatile market environment characterized by reduced liquidity and forced selling as leveraged positions unwind.
