Only a limited number of Bitcoin treasury companies are expected to weather the storm as market conditions tighten, according to a recent report from venture capital firm Breed. The report highlights the risk of a “death spiral” for firms holding Bitcoin that trade near their net asset value (NAV), potentially leading to widespread market instability. The Role of MNAV in Treasury Company Resilience The success of Bitcoin treasury companies is closely tied to their ability to maintain a market value that exceeds their NAV, referred to as MNAV. According to Breed, the higher this multiple, the greater the firm’s ability to attract critical debt and equity financing needed for converting fiat capital into Bitcoin. When this premium erodes, the risk of financial instability increases sharply. Breed outlined a seven-stage process that begins with a decline in Bitcoin’s price. As Bitcoin value falls, so does the company’s MNAV, bringing share prices closer to their underlying NAV. This dynamic reduces investor confidence and makes it increasingly difficult to raise additional capital. This lack of access to fresh credit, combined with looming debt maturities, can trigger margin calls. Firms may be forced to liquidate their Bitcoin holdings at inopportune times, further depressing the asset’s price. This may result in a consolidation wave, with stronger companies absorbing weaker ones, potentially leading to a broader crypto market downturn. “Ultimately, only a select few companies will sustain a lasting MNAV premium,” Breed’s report stated. “They will earn it through strong leadership, disciplined execution, savvy marketing, and distinctive strategies that continue to grow Bitcoin-per-share regardless of broader market fluctuations.” Equity Financing Provides Some Market Protection The report notes that the potential fallout from the “death spiral” may be limited, at least in the near term. Breed’s researchers said most Bitcoin treasury companies are currently funding their operations through equity rather than debt. This reduces the risk of forced Bitcoin sales due to debt pressures, which could otherwise cause more significant market disruptions. However, this balance could shift in the future. If debt financing becomes more attractive or widespread, the sector might face deeper vulnerabilities, increasing the chance of systemic risk. Treasury Bitcoin Holdings Surge in 2025 The corporate Bitcoin treasury trend has grown rapidly, especially since 2020 when Michael Saylor’s company, Strategy, began acquiring large quantities of Bitcoin as part of its financial strategy. Since then, the idea has caught on across the financial world. In 2025, over 250 entities now hold Bitcoin as a treasury asset. These include corporations, pension funds, ETFs, government agencies, and crypto service providers. Breed’s report warns that only a fraction of these entities are structurally sound enough to withstand extended volatility and maintain a MNAV advantage. The concern is that others, particularly those heavily reliant on market price appreciation and external financing, may not survive prolonged market downturns. As competition intensifies and the market consolidates, only the most disciplined and strategically agile companies will likely remain standing.
