A Galaxy Digital report finds 40 percent of publicly traded Bitcoin treasury companies trade below net asset value, with late entrants most exposed to forced liquidation or merger.
Galaxy Digital has warned that at least five publicly listed digital asset treasury companies face asset sales, forced mergers, or outright closure in 2026 as the economics of the crypto treasury model deteriorate under sustained market pressure. In its annual report published in early April, the New York-based financial services firm found that approximately 40 percent of publicly traded Bitcoin treasury companies are now trading at discounts to their net asset value, a structural breakdown that undermines the capital-raising mechanism on which these businesses depend. The report signals the end of what Galaxy analysts termed the "premium era" of crypto treasury strategies, during which companies could issue equity at valuations exceeding the market price of their underlying digital asset holdings.
How the Treasury Model Broke Down
The digital asset treasury model, popularised by Strategy Inc. beginning in 2020, relies on a company purchasing and holding cryptocurrency on its balance sheet while issuing equity and convertible debt to fund further acquisitions. When shares trade at a premium to NAV, the company can raise capital at an effective discount, using the proceeds to buy more crypto and further increase per-share asset value in a self-reinforcing cycle. Strategy's execution of this approach has been remarkably successful, with the firm now holding 766,970 BTC valued at approximately $53.2 billion. However, the model requires sustained investor confidence that the premium will persist. Galaxy's data shows that for most imitators, that confidence has evaporated. Bitcoin's 24 percent drawdown in Q1 2026, its steepest quarterly decline since 2018, exposed firms with weak balance sheets, high debt service costs, and no revenue streams beyond the hope of token price appreciation.
Which Firms Are Most Vulnerable
Galaxy's report identifies late market entrants as the most exposed cohort. Companies that adopted the treasury model in 2025 or early 2026, often converting from unrelated business lines, entered at elevated asset prices and issued debt on terms that assumed continued Bitcoin appreciation. With BTC trading around $69,000, well below its January 2026 peak above $100,000, several of these firms face loan covenants that could trigger forced liquidation. The report does not name specific companies but notes that firms with market capitalisations below $500 million, limited cash reserves, and mNAV ratios below 1.0 are at highest risk. By contrast, Galaxy identifies Strategy and Japan-based Metaplanet as likely survivors, citing their scale, disciplined capital structures, and established access to capital markets.
The Ethereum Treasury Exception
Not all treasury strategies are struggling equally. Bitmine Immersion Technologies, the largest Ethereum treasury company, reported holdings of 4.803 million ETH worth $10.2 billion and announced a NYSE uplisting effective 9 April. Unlike Bitcoin-only treasury firms, Bitmine generates $196 million in annualised staking revenue through its MAVAN platform, giving it a yield component that pure-hold strategies lack. Galaxy's report acknowledges that yield-bearing treasury models may prove more durable than their passive counterparts, though it cautions that staking revenue remains dependent on Ethereum network economics and could decline if validator participation increases or protocol fees fall. The divergence between Bitmine's trajectory and the broader treasury sector underscores a growing recognition that holding crypto on a balance sheet is not, by itself, a business model.
Investor Sentiment and the Secondary Market
DL News reported that investors are "scrambling to pick new winners among smouldering crypto treasury firms," a characterisation that captures the mood shift in the sector. Shares in several smaller treasury companies have fallen 30 to 50 percent from their 2025 peaks, and trading volumes have thinned as institutional holders reduce exposure. The NAV discount creates a paradox: at current prices, buying shares in a treasury company is cheaper than purchasing the underlying Bitcoin directly, yet investors remain unwilling to close the gap because they doubt management's ability to survive a prolonged downturn. CoinDesk's editorial board argued in an April commentary that digital asset treasuries "must now earn their keep," calling for firms to develop operational revenue streams or return capital to shareholders rather than continuing to issue dilutive equity.
What to Watch in Coming Months
Galaxy's five-firm estimate may prove conservative if Bitcoin fails to recover above $80,000 by mid-year. Several treasury companies have convertible notes maturing in Q3 2026, and refinancing at current NAV discounts would be severely dilutive. Merger activity is another signal to monitor. Two undisclosed treasury firms have reportedly engaged advisers to explore combination transactions, according to people familiar with the matter cited by Bloomberg. For investors, the Galaxy report is a reminder that the crypto treasury strategy, while powerful in the right hands, carries execution risks that multiply when market conditions turn. The firms that survive this shakeout are likely to emerge with stronger governance, clearer revenue models, and a more sober relationship with leverage.
