Crypto Treasury Hype Fizzles
Olivia Capozzalo & Camila Russo
August 19, 2025
gm, Defiers!
Today’s big story:
- The market is flashing warning signs that the hype around crypto treasury companies may be running out of steam
In other news:
- Tether just hired Bo Hines as a strategic advisor for its U.S. expansion
- Story is facing community backlash after co-founder steps down
- A biotech firm has pivoted to become an ETH treasury firm called ETHZilla
- Confidentiality in blockchain: Rand Hindi on Zama's Vision and the future of on-chain transactions [SPONSORED]
- TezDev highlights: blockchain innovation, gaming, and real-world impact [SPONSORED]
- Using AI for developer education | RareCode by RareSkills [SPONSORED]
Read more below! But first, please give our sponsors some love; they make this newsletter possible.
Coinspect delivers full-stack security for web3 builders. We uncover critical vulnerabilities others miss, letting you innovate confidently, ship faster, and safeguard users, assets, and reputation through industry-trusted services.
Mezo Mainnet is live! Mint MUSD — Bitcoin-backed, dollar-pegged, and fully permissionless. BTC is finally productive. Start borrowing today at mezo.org/overview
Rootstock Golden Sats Challenge: Dive into Bitcoin DeFi on Rootstock. Bridge, swap, lend—and earn your share of over $500K in rewards, plus 5 Lil Pudgy NFTs and additional ecosystem rewards.
Unlock Bitcoin DeFi with the Golden Sats Challenge
The Golden Sats Challenge is your gateway to exploring DeFi on Bitcoin through the Rootstock ecosystem. From now until late October, participants can bridge, swap tokens, lend, borrow, and interact with top Rootstock dApps to earn rewards.
Over $500,000 in prizes are up for grabs, including 5 exclusive Lil Pudgy NFTs and other ecosystem rewards. Whether you’re a DeFi newcomer or a seasoned user, Golden Sats offers a fun, gamified way to learn, earn, and experience Bitcoin-powered landscape.
Every qualifying action on Rootstock earns you points, boosting your chances to claim a share of the prize pool. Start stacking your Golden Sats today.
READ MORE: Golden Sats Challenge: Stack, Stake, and Score Big on Rootstock
DFS Trending and DFS Zaps: DeFi Saver Launches New Strategy Discovery Tool
DeFi Saver just launched DFS Trending and DFS Zaps, two interconnected features designed to simplify and aid users in choosing their DeFi strategies. The Trending page offers an overview of the most common strategies currently being executed via supported DFS protocols. These strategies are presented in the form of Zaps, custom-made recipes made in advance, so that once you find a strategy you fancy, execution is just one click away!
Try it out now via DeFi Saver.
We’re back! Here’s what you need to know in web3 today
📈 Markets in the Last 24 Hours
| TICKER | VALUE | 24H | |
|---|---|---|---|
 | Bitcoin | $115,724 | 0.06 % |
 | Ethereum | $4,308.2 | -1.10 % |
 | XRP | $3.02 | 0.65 % |
 | BNB | $844.75 | 0.75 % |
 | Solana | $182.46 | -0.17 % |
 MessariPortals | MINDSHARE Rank | MINDSHARE % Change (7d) |
|---|---|---|
 | MINDSHARE Rank | MINDSHARE % Change (7d) |
 |  | -27.20% |
 | | -56.45% |
 | | -77.28% |
| Powered by Messari Portals | ||
Today’s Big Story
Is the Crypto Treasury Company Hype Fizzling Out?
The market is flashing warning signs that the hype around crypto treasury companies may be running out of steam.
The increasingly popular strategy for the last few months was to take a company with publicly traded shares, wipe out its previously lackluster business, and transform it into a vehicle for holding crypto. This gave investors a way to get exposure to crypto via a familiar asset (stock), while management could run something that looks like a fund, minus the expenses and more restrictive regulations. Michael Saylor’s Microstrategy, now Strategy, invented the playbook.
As companies have increasingly jumped on the Strategy bandwagon, holdings have become more and more risky. It started with BTC treasuries, soon ETH treasuries became popular, and other altcoins like HYPE, SUI, and FET have followed.
These shares enjoyed significant premiums to their net asset value (NAV) for months, signaling investor appetite for these vehicles. But the tide is now turning.
These companies’ premium to NAV has been justified by the belief that management might extract additional value from the crypto treasury assets, whether by staking, lending, or using the crypto to build new products or business lines. But as of last month, that premium has been shrinking rapidly, and in some cases, disappearing entirely.
Strategy and Semler Scientific Premiums Compress
Strategy once traded at more than twice the value of its Bitcoin holdings, as investors bet on the company continuing to aggressively accumulate BTC while also building institutional tools around it. But since mid-July, the stock’s premium has compressed significantly, even as the firm continues to buy Bitcoin, according to data compiled by Blockworks.
Semler Scientific, another Bitcoin treasury company, is faring worse. The company, which began buying BTC earlier this year, now trades only slightly above its NAV. That’s an improvement from just a couple of months ago, when the stock dipped below 1.0 NAV, meaning its market cap fell beneath the value of its Bitcoin holdings—essentially a vote of no confidence in its strategy or execution.
Bitcoin Treasury Companies mNAV. Source: Blockworks
Ethereum Treasury Companies’ Premiums are Shrinking
The trend is even more stark among Ethereum treasury companies. Newer and smaller than their Bitcoin-focused peers, these firms include names like BTCS, BitMine Immersion Technologies (BMNR), SharpLink (SBET), and GameSquare (GAME). All of them have seen their premiums compress in the past month, with BTCS notably dropping below 1.0 mNAV on July 28 and the discount deepening since, Blockworks data shows. That implies the market is valuing the entire company, including its ETH holdings, at less than the ETH it owns outright.
One reason this may be happening is that investors simply no longer need these companies to get crypto exposure. In the case of Bitcoin, access is easier than ever: investors can buy spot BTC directly in traditional brokerage accounts, via ETFs, or with one tap via most major fintechs. If the only thing a treasury company offers is passive Bitcoin exposure, it’s no longer compelling.
For Ethereum, the dynamic is even more pronounced. In addition to widespread ETH access, there’s growing speculation that the SEC may soon approve staking within ETH ETFs. If that happens, ETFs would not only match the ETH these companies hold, but also offer the yield many of them promised—making ETH treasury companies even less necessary, and their premiums harder to justify.
Ethereum Treasury Companies mNAV. Source: Blockworks
Short Sellers Notice
Short sellers have been quick to pick up on the shift. According to Fintel, short interest in BTCS has risen to 7.4% of the float, a striking level for a relatively obscure Ethereum proxy (ratios above 5% are generally considered high). That pressure prompted management to propose a creative (some might say desperate) countermeasure: the “Bividend” — a plan to reward shareholders who lock up shares with dividends paid in ETH. Locking up shares would reduce the amount of stock for short sellers to borrow.
Meanwhile, other major treasury firms are also being targeted. Strategy now has 8.4% of its float sold short, and Bit Digital (BTBT) is facing an even larger short position at 12.6%.
So What?
The danger for both investors and companies when market cap falls below NAV is significant. For shareholders, the immediate risk is being trapped in an asset that looks cheap on paper — buying $1 worth of ETH exposure for 80 cents — but has no mechanism for realizing that value.
Unlike ETFs, there is no creation-redemption process to arbitrage away the discount. Investors are left hoping that management will either return capital, sell the company, or pull off a business pivot.
For the companies, the risks are existential. If shares are trading below NAV, any attempt to raise capital through issuing stock becomes value-destructive. They’re effectively selling crypto at a discount to its market price, eroding trust and compounding their financial problems. The company may struggle to retain talent, raise funds, or justify its existence, especially as ETH ETFs gain ground with lower fees, regulatory clarity, and even staking yield.
The big promise of crypto treasury companies was that they offered more than just passive exposure. They were supposed to use their crypto to build. But unless these firms can evolve quickly and prove they can generate value beyond just sitting on digital gold, the market seems ready to call their bluff.
With love,
Cami, founder of The Defiant
Forwarded this newsletter? Subscribe for insights and curated news from The Defiant team, Monday-Friday. It’s free.
Subscribe to The Defiant Daily
🎬WATCH
Intention, Privacy, and Trust: Adrian Brink’s Vision for Resilient Communities
In the latest episode of The Defiant Podcast, Vinny sat down with Adrian Brink, co-founder of Anoma and Namada, to explore the intersection of privacy, sovereignty, and resilience in web3.
Adrian shares his journey from the early days of building Cosmos to building intent-based systems that empower communities and protect dignity at scale. Adrian also discusses the Tornado Cash case, the role of intent-based systems in addressing regulatory concerns, and how cryptography can help communities defend against external threats.
From Digital Gold to Everyday Finance: Matt Luongo On How Bitcoin is Growing Up [SPONSORED]
In this episode of Defiant Voices, Matt Luongo, founder of Thesis, dives into Bitcoin's evolution and its growing acceptance within traditional finance. Matt explores how Bitcoin has matured from being seen as a "boomer coin" to a widely accepted "digital gold" and how its utility is shifting toward practical, real-world applications.
Discover how innovations like Mezo are enabling new ways to use Bitcoin, such as Bitcoin-backed mortgages and stablecoins, which play a crucial role in lending. Matt also discusses the importance of security in Bitcoin systems, the demand for fixed rates and low borrowing costs, and how acquisitions like Lolli aim to expand Bitcoin's utility globally.
Top News in the Past 24 Hours
- Tether Hires Former White House Crypto Adviser Bo Hines for US Push Stablecoin giant Tether announced today that it has hired Bo Hines, the former executive director of the White House Crypto Council in the Trump administration, as strategic advisor for digital assets and United States strategy.
- Story Faces Community Backlash Following Jason Zhao’s Departure Story, a blockchain platform for programmable intellectual property with $23 million in total value locked, is drawing criticism from the crypto community after its co-founder and CPO, Jason Zhao, announced that he is stepping down.
- ETHZilla Rebrands with Ethereum Treasury Strategy, Begins Trading on NasdaqETHZilla Corporation, formerly a biotech firm called 180 Life Sciences Corp., launched its new brand and ETH treasury strategy yesterday. The Palm Beach–based company disclosed that it has acquired 94,675 ETH at an average price of $3,902.20 – worth about $411 million at current prices.
- FEATURE: Circle’s Arc Layer 1 Re-ignites the Open Versus Permissioned Chain Debate Circle’s newly launched Arc, described by the firm as an open Layer 1 blockchain, is dividing experts across the crypto community, with some saying its design undermines the principles of decentralized finance, and others calling it a practical step that boosts USDC’s infrastructure.
Trending on The Defiant
- Solana Hits All-Time High TVL Even as Trading Volume Crashes
- Liquid Staking TVL Hits Record $86B amid ETH Rally and Growing Institutional Adoption
- Crypto Markets Struggle Amid Macro Uncertainty, While Ethereum ETFs See Record Inflows
- Over 50% of July’s Web3 Gaming Funding Went to a Single Title
- Hyperliquid TVL Crosses $6 Billion
- Ethereum Stakers Rush to Exit on Price Pump
That’s it for today — if you enjoyed this newsletter, tell your friends! https://thedefiant.io/subscribe
Free newsletters
Good reporting. Delivered.
Choose the newsletters you want in your inbox.
Free. Unsubscribe anytime.
