Aftermath of sharp drops in listed Bitcoin companies…Global retail investors lose about $1.7 billion

Bitcoin (BTC)-exposed retail investors who sought exposure by investing in "Digital Asset Treasury (DAT)" companies have reportedly incurred about $1.7 billion (about 2.42 trillion won) in losses. This is attributed to the collapse of an overvalued share premium.

On the 18th, Bloomberg reported that Singapore's 10X Research said in a recent report that "individual investors who invested in Bitcoin treasury firms lost about $1.7 billion in total." After this year's market correction, DAT companies' share prices plunged, greatly narrowing the gap with the actual value of their Bitcoin holdings.

The report cited Japan's Metaplanet and Strategy (formerly MicroStrategy), led by Michael Saylor, as representative examples. Both companies issued and sold shares to buy Bitcoin and expanded their market capitalizations, but their shares had been trading at overheated levels relative to net asset value (NAV). Strategy's shares, which at one point traded at a 3–4x premium to its Bitcoin holdings, have now fallen to about 1.4x.

10X Research pointed out that "the core strategy of Bitcoin treasury firms was a simple structure of selling shares at prices above net asset value and using the difference to purchase Bitcoin." Metaplanet bought about $1 billion worth of Bitcoin, after which its market capitalization soared to $8 billion, but it has now fallen to about $3.1 billion. Over the same period, its Bitcoin holdings increased to $3.3 billion, but shareholder value decreased by $4.9 billion.

The report said, "The era of financial magic for Bitcoin treasury firms is ending," and analyzed that "these companies should move away from an excessive net asset value premium structure and transition to an asset management model centered on arbitrage."