10x Research: End of “financial magic” after Bitcoin treasury NAVs fall

The net asset values ​​(NAVs) of digital asset treasures (DATs) have fallen sharply, marking the end of what some analysts call the “age of financial wizardry.” Despite this pullback, market experts believe that this correction could provide savvy investors with new opportunities for long-term entry into now undervalued Bitcoin businesses.

Bitcoin Treasury Valuations Correct Sharply as Era of “Virtual Wealth” Ends

According to a report from 10x Research, the sharp fall in NAV marks a major turning point in how companies holding bitcoin are valued. “The age of financial magic is coming to an end for these companies,” explain the analysts, recalling that they had generated billions in “virtual wealth” by issuing shares that were largely overvalued compared to their real bitcoin holdings.

The report details how this model transferred value from retail investors, who were buying at a premium, to companies, who were accumulating bitcoin with this capital raised. Analysts point out that shareholders lost several billions while executives converted this inflated capital into actual BTC reserves.

10x Research cites Metaplanet, the fourth largest Bitcoin cash company, as a case study. Its market capitalization once reached $8 billion despite holding just $1 billion in bitcoin. Today, she is worth 3.1 billion, backed by 3.3 billion BTC, a valuation more in line with her actual assets.

MicroStrategy: a complete “round trip” on valuation

A comparable situation is observed at MicroStrategy, led by Michael Saylor. The company's net asset value had exploded during the bitcoin boom before falling back to original levels. With the disappearance of speculative premiums, many retail investors recorded significant losses.

With the complete return of NAVs, retail investors have lost billions and undoubtedly lack the conviction to strengthen their positions.

10x Research Analysts

During the market surge, some were buying stocks at prices two to seven times the real value of the underlying bitcoin. The end of these premiums therefore led to a violent correction for the most exposed portfolios.

However, the standardization of NIVs could constitute an opportunity. Several digital asset companies now trade around or below the true value of their bitcoin, providing investors with indirect exposure with higher performance potential than the simple spot market.

This market correction also filtered out the weakest players, leaving room for financially stronger and better structured companies. These survivors could embody a new generation of Bitcoin asset managers, more focused on stable returns and long-term strategies.

Treasury Companies Poised to Lead the Next Cycle

10x Research predicts that these companies will play a central role in the next phase of the market. As bitcoin matures, well-capitalized digital asset troves with effective trading strategies should continue to generate significant returns, sometimes outperforming the overall market.

Recent market data illustrates this trend:

• MicroStrategy (MSTR) rose 2% on Friday, closing at $289.87, a short-term rebound despite a still fragile environment.
• The stock nonetheless remains down 39% from its November 2024 high of $473.83.
• Metaplanet (MTPLF) fell 6.5% on the Tokyo Stock Exchange, closing at 402 yen ($2.67).
• The stock has lost 79% since mid-June, when it peaked at 1,895 yen ($12.58), evidence of the extent of the Bitcoin treasure correction.

Despite an unfavorable context, MicroStrategy continues to accumulate bitcoin. The company recently added 220 BTC for $27.2 million at an average price of $123,561 per unit, bringing its holdings to over 640,000 BTC, confirming its long-term exposure strategy. At the time of writing, bitcoin was trading at $108,196, after a relatively stable session.