Analysis: Bitcoin Treasury Companies Face Existential Risk
VC Firm Breed Outlines “Death Spiral” Risk For Many
June 2025
Select Bitcoin treasury companies and their respective MNAV. Source: Breed
The Path to Collapse
A report from venture capital firm Breed cautions that the Bitcoin treasury sector faces a “death spiral”.
The survival of these companies depends on maintaining a market multiple over their net asset value (MNAV), according to the analysis.
Breeds 7-Phase Decline Process
Breed outlines a specific path leading from challenge to collapse:
- BTC price drop
- Falling MNAV near NAV
- Reduced access to financing
- Margin calls
- BTC forced selling
- Further BTC price collapse
- Consolidation via acquisition
This cascade could spark a prolonged bear market.
“Ultimately, only a select few companies will sustain a lasting MNAV premium. They will earn it through strong leadership, disciplined execution, savvy marketing, and distinctive strategies that continue to grow Bitcoin-per-share regardless of broader market fluctuations.”
— Breed Research
Why the Risk? Financing Dynamics
The collapse mechanism is triggered by a company’s need for financing.
Access to debt and equity dries up as credit conditions tighten, forcing companies to sell assets to meet obligations.
Equity financing currently limits wider fallout, but a shift to debt financing could change this dynamic entirely.
The “death spiral” of a Bitcoin treasury company. Source: Breed
BTC Treasury Goes Mainstream
Strategy, led by Michael Saylor, played a pivotal role in popularizing the concept of corporate Bitcoin treasuries following its 2020 initiation.
Video: Strategy’s Bitcoin Journey
BitcoinTreasuries reports over 250 entities now hold Bitcoin, including corporations, government entities, ETFs, pension funds.
