Retail investors have collectively lost around $17 billion while attempting to gain indirect exposure to Bitcoin by purchasing shares of publicly listed companies holding the cryptocurrency in their treasuries, according to a new report by Singapore-based 10X Research.
The report, titled “After the Magic: How Bitcoin Treasury Firms Must Evolve Beyond NAV Illusions,” reveals that companies such as Japan’s Metaplanet and Michael Saylor’s Strategy (MSTR) once traded at massive premiums to the actual value of their Bitcoin holdings.
These inflated valuations have since collapsed, leaving investors with steep losses.
During the height of the crypto boom, so-called digital asset treasury (DAT) firms were able to sell their shares at prices two to seven times higher than the net asset value (NAV) of their Bitcoin reserves. These premiums have now evaporated, signaling what 10X Research describes as the end of the “age of financial magic” for Bitcoin treasury companies.
The report highlights Metaplanet as a prime example. Its $1 billion Bitcoin investment once supported an $8 billion market capitalization, before plunging to $3.1 billion, roughly in line with its $3.3 billion in BTC holdings.
The firm’s shareholders collectively lost $4.9 billion in value, even as Metaplanet managed to accumulate $2.3 billion worth of Bitcoin during the period.
Similarly, shares of Michael Saylor’s Strategy once traded at three to seven times the value of its Bitcoin holdings. That multiple has now shrunk to about 1.4 times NAV, erasing much of the speculative premium from previous market cycles.
10X Research analysts said retail traders “overpaid for Bitcoin exposure by roughly $20 billion,” while DAT firms converted inflated share prices into real Bitcoin on their balance sheets.
The report concludes that the once-booming business model of raising capital at inflated valuations to buy Bitcoin has reached its limit, forcing treasury-based Bitcoin firms to evolve beyond what it calls “financial alchemy