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Strategy, for instance, saw its valuation drop from a high of three times NAV down to below one, with its shares now trading at a discount. This decline is not an isolated event but part of a broader correction, not unlike the recent reversal of a rally that had been fueled by optimistic Trump-era policies.
How This Affects Treasury Companies
Many of these firms entered the market during the Bitcoin rally, often with positive premiums. But as the price declined, they entered a precarious position. Bitcoin holdings are now at or near the company's cost basis, meaning that further price drops could cause significant losses. For example, Strategy's holdings are close to a point where unrealized losses could mount if Bitcoin falls further, potentially forcing liquidations.