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

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📈 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)
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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

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