Bitcoin’s October sell-off offered a reality check for the companies built for the sole purpose of holding it. The digital-asset treasury model, in which firms raise capital to buy more BTC, looks increasingly fragile when markets turn against them.
A Bear Market Could Expose the Limits of the Digital-Asset Treasury Model
20 October 2025 - 17:55 CEST
In early October, we asked whether investors would tolerate negative equity positions indefinitely, particularly when leverage was involved.
Friday’s price drop provided an answer: they will not.
Shares tracking Bitcoin price
As BTC fell to $103,584, the share prices of both Strategy and Metaplanet dropped in parallel. Both recovered as BTC stabilized, but the reaction revealed what many suspected: investor appetite for leveraged Bitcoin exposure is finite.
Strategy and Metaplanet have tried to build a business model that turns their holdings into something more than a long-term bet. Strategy offers equity and debt securities that monetize Bitcoin exposure, while Metaplanet describes its coins as a reserve asset supporting “innovative equity and debt financing strategies”. It is a sophisticated wrapper for a simple idea: that Bitcoin will keep rising.
Metaplanet’s precarious position
Metaplanet’s numbers show how precarious that assumption is. Its average purchase price of $105,709 per Bitcoin left it underwater on Friday, and its $3.05bn market capitalization now sits below the $3.4bn market value of its holdings. That makes it difficult to argue the company adds value beyond what investors could achieve by buying Bitcoin directly.
Accounting for BTC dips
Accounting rules only intensify the pressure. Digital assets are treated as indefinite-lived intangibles – accounting terminology meaning that losses are booked when prices fall but cannot be reversed when they rebound. For treasuries built on continuous accumulation, that asymmetry amplifies the downside and obscures the upside, hardly an appealing prospect for equity investors.
Reducing confidence
What matters most, however, is confidence. Metaplanet’s share price has fallen from ¥1,930 in June to ¥454, echoing Strategy’s decline from $457 to about $300 over a similar period. The issue is not just the Bitcoin price but the erosion of belief that these corporate structures can survive prolonged drawdowns.
The digital-asset treasury was an ambitious attempt to financialize Bitcoin’s scarcity, to create listed proxies for a hard-money narrative. In a bear market, scarcity alone is not a business model. Without steady inflows and expanding valuations, the feedback loop that once created value now works in reverse.
A significant enough downturn will not only dent balance sheets. It will test whether the entire idea of corporatized Bitcoin exposure, the notion that one can build a company out of holding an asset that was meant to need one, was ever sustainable.
