Metaplanet's fortunes have dramatically shifted from $600 million in unrealized profits to $530 million in losses. Its strategy, once enjoying a 79% premium, now sees shares trading at a 15.5% discount to Bitcoin's net asset value (NAV). Three major treasury firms now find themselves holding Bitcoin purchased at prices exceeding $100,000, as the cryptocurrency's value hovers around $89,000. These Bitcoin treasury companies are facing significant challenges, with Metaplanet, a key player following Strategy, transitioning from substantial profits in early October to substantial losses by December 1, as reported by Galaxy Research. This downturn is a direct result of Bitcoin's 25% price decline since its peak in October.
As Bitcoin continues to trade near $89,000, companies that aggressively acquired the digital asset near its peak are now facing substantial financial difficulties. The once-promising model of digital asset treasury management is showing cracks, as firms that raised capital to invest in Bitcoin at over $100,000 are now grappling with significant unrealized losses, exacerbated by the erosion of their equity premiums. The value of these companies' shares has also taken a hit, with many seeing declines even before Bitcoin's price drop.
Metaplanet, which transitioned from a hotel operator to a Bitcoin treasury, faces an average cost of $108,000 per Bitcoin. With Bitcoin currently at $89,000, the company is underwater by nearly $17,000 per coin across its 30,823 Bitcoin holdings. Nakamoto has been particularly affected, holding 5,398 Bitcoin at an average cost of $118,000, translating into unrealized losses exceeding $180 million, alongside a more than 95% plunge in its share price. Meanwhile, Semler Scientific, which holds 5,048 Bitcoin at an average cost of $95,000, is dealing with over $50 million in unrealized losses. Only Strategy remains in a profitable position, with 650,000 Bitcoin at an average cost of $74,436, though its unrealized gains have plummeted from $28.4 billion in July to $6.9 billion.
The situation is compounded by collapsing equity premiums. In July, when Bitcoin was near $118,000, treasury companies enjoyed significant premiums over their Bitcoin NAV. Metaplanet traded at 237% of its Bitcoin market-to-net-asset value, and Strategy at a 79% premium. Today, those premiums have either vanished or turned negative. Strategy now trades at a 15.5% discount to its Bitcoin NAV for the first time since its transformation from a software company into a treasury entity. Metaplanet's premium has shrunk to 6% from 237%, while Scientific trades at a 29% discount, and Nakamoto at more than 50%. This compression signals a deep loss of confidence in the treasury model. When Bitcoin was climbing, investors paid premiums with the expectation of continued accumulation and appreciation. Now, with Bitcoin's decline and companies struggling, investors are pricing in financial distress.
Moreover, treasuries have curtailed their Bitcoin purchases. November marked the lowest level of Bitcoin acquisitions by these companies this year, according to BitcoinTreasuries.net.