Bitcoin-linked treasury stocks are losing their premium just as on-chain capitulation spikes to a new high. The combination shows leveraged equity bets and spot holders taking heavy losses at the same time. Galaxy Says Bitcoin Treasury Trade Hits Limit as Premiums Disappear Galaxy Research says the bitcoin “digital asset treasury” trade has reached a turning point as once-rich equity premiums vanish and stock issuance turns from growth tool into drag. In a December 4 report , the firm revisits its July warning that the digital asset treasury, or DAT, model only works while a company’s shares trade above the value of its underlying bitcoin holdings. At that time, stocks such as Strategy, Metaplanet, Semler Scientific and Nakamoto traded at steep premiums to their bitcoin net asset value, which allowed them to issue new shares and use the proceeds to buy more BTC. Galaxy describes that structure as a kind of liquidity derivative. The model relies on equity staying above BTC net asset value so that each new share increases, rather than reduces, bitcoin per share. Once the premium disappears, the feedback loop reverses. According to the report, that reversal is now underway. Bitcoin has dropped from around 126,000 dollars in October to as low as 80,000 dollars, and it trades near 92,000 dollars at the time of writing. The move followed an October 10 deleveraging event that forced liquidations in futures markets, cut open interest and left liquidity weaker into the fourth quarter. Those conditions, Galaxy says, have pushed investors toward a risk-off stance and slowed inflows into crypto exchange-traded funds. For DAT companies, the impact has been sharp. As BTC fell and risk appetite faded, bitcoin net asset value per share dropped and equity premiums compressed. In many cases, shares now trade at or below the value of the bitcoin they represent. That shift means new stock offerings no longer provide accretive capital to buy more BTC and instead dilute existing holders if issued below NAV. Galaxy focuses on four firms as case studies: Strategy, which it cites as the largest and most visible corporate bitcoin holder; Metaplanet in Japan; Semler Scientific; and Nakamoto, now listed via its merger with Kindly MD under the NAKA ticker. Together, they show how a high-beta equity trade can move when conditions change. Galaxy Report Shows Bitcoin Treasury Stocks Flip From Premiums To Sharp Drawdowns The report highlights deep drawdowns across these stocks since their 2025 highs. Nakamoto’s share price has fallen more than 98 percent, which Galaxy compares to the kind of wipeout seen in memecoin markets. By contrast, bitcoin itself is down about 30 percent from its peak, underscoring how equity, issuance and balance-sheet leverage magnified losses on the way down after boosting gains earlier in the year. Unrealized profit and loss figures show the same shift. Galaxy cites Metaplanet’s public dashboard, noting that the company reported more than 600 million dollars in unrealized bitcoin profits in early October. By December 1, with BTC lower, that position showed roughly 530 million dollars in unrealized losses instead. The report adds that Metaplanet and Nakamoto now hold bitcoin at an average cost above 107,000 dollars per coin, leaving their current unrealized PnL firmly negative at recent prices. Metaplanet Unrealized Bitcoin Losses. Source: Galaxy Research A comparison between data from July and updated figures for December illustrates how fast equity premiums have compressed. In mid-summer, Metaplanet traded at about 236 percent of its bitcoin NAV. Today, Galaxy says, premiums for Strategy , Metaplanet and Semler Scientific have “compressed mightily” and often sit near zero or at a discount compared with their underlying holdings. Galaxy concludes that the first phase of the bitcoin treasury trade has likely run its course. The original model, built on issuing stock at a premium and recycling the proceeds into more BTC, has met a natural boundary condition: once shares trade at or below NAV, issuance becomes a tax on holders instead of a growth engine. Equity Premium To Bitcoin NAV Compression. Source: Galaxy Research From here, the report says, the sector faces a period defined by compressed premiums, balance-sheet stress and a greater focus on liquidity management rather than pure bitcoin accumulation. Bitcoin Capitulation Metric Surges to Record Level Meanwhile, Bitcoin’s capitulation metric has climbed to a new all-time high, signaling the strongest wave of forced selling pressure recorded in this cycle. The chart shared by CryptoGoos shows the capitulation line spiking sharply as price moves lower, creating its widest divergence since early 2024. The move reflects heavy realized losses as holders sell into declining markets. Bitcoin Capitulation Metric And Price. Source: Glassnode / X The metric measures how intensely investors lock in losses during downturns. When it rises while price falls, it often indicates that weaker hands are exiting positions at scale. This trend has accelerated in recent weeks, and the latest reading marks the steepest jump in more than a year. At the same time, Bitcoin’s price remains well below its mid-2025 highs. The chart shows that previous capitulation spikes aligned with local bottoms or periods of market stress. However, the current spike exceeds all earlier levels, suggesting unusually strong pressure across the market as long-term and short-term holders both realize losses at the same time. The surge highlights a market environment defined by volatility, reduced liquidity, and forced selling as leveraged positions unwind.
