Bitcoin Is Surging, But Investors Are Still Worried About Bitcoin Treasury Companies. Here's Why They're Right.

Bitcoin (CRYPTO: BTC) experienced its most successful month since 2025, surging by 24% as of August 28, 2026. Bitcoin treasury companies, which hold substantial amounts of Bitcoin on their balance sheets, have benefited from this rally. However, skepticism remains regarding these entities. For instance, Strategy (NASDAQ: MSTR), the company with the largest Bitcoin holdings, currently has a market valuation (mNAV) of 1.06, significantly lower than its original premium of 3.89 in late 2024.

This lower premium indicates diminished trust in the Bitcoin treasury model. Bitcoin treasury companies, like Strategy, Twenty One Capital, and others, primarily focus on buying and holding Bitcoin, issuing debt and equity to fund purchases. They often use a flywheel method, where issuing shares at a premium enables the purchase of additional Bitcoin.

While this strategy has yielded substantial returns during bull markets, it has also led to significant losses in bear markets, as the premium collapses with falling Bitcoin prices. The primary issue with these companies is that they lack any fundamental value creation beyond financial engineering, which only functions during favorable market conditions.

Several Bitcoin treasury companies have been compelled to sell their holdings this year, with MARA Holdings and Empery Digital among them. Some, including Satsuma Technology, have abandoned the model altogether. Investing in Bitcoin treasury companies offers no inherent long-term value, as their sole purpose is to buy Bitcoin. If direct exposure to Bitcoin is desired, purchasing the coin itself or investing via Bitcoin ETFs is a safer alternative.