📉 What Galaxy warns — premium collapse & capitulation
Galaxy says that the “digital-asset-treasury” (DAT) model — where firms issue equity at a premium over the net-asset-value (NAV) of their Bitcoin holdings, then use the proceeds to accumulate more $BTC — has broken down. With Bitcoin’s decline from ~$BTC
126,000 in October to as low as $80,000, many DAT firms’ equity prices now trade at or below the value of their underlying BTC holdings.
As a result, what was a virtuous “loop” of issuance → BTC accumulation → rising equity value has reversed: leverage has turned into a liability, and the “premium” that once justified issuance has vanished.
Some companies’ losses have been dramatic — one firm, for example, has seen its share price plunge over 98% from its peak.
⚠️ Why this matters — broader implications
Treasury-firm stocks now pose outsized risk: Where some firms once offered leveraged upside to BTC moves, they now magnify downside. Underperformance is often worse than Bitcoin itself, especially for firms that loaded up BTC near peak prices.
Liquidity & solvency pressure on smaller players: With equity issuance no longer accretive, firms relying heavily on fresh capital may face liquidity crunches or forced asset sales.
Investor caution may rise — risk-off sentiment could permeate crypto equities: The “Darwinian phase” Galaxy describes suggests only strong firms with prudent balance-sheet management may survive; speculative or debt-heavy firms may struggle.
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