Bitcoin Treasury Firms Face ‘Darwinian Phase’Unrealized Losses Mount

The corporate treasury experiment is facing its first existential crisis. With Bitcoin trading below $87,000 on Thursday, down nearly 30% from its October peak of $126,000, a widely cited report warns that public companies holding the asset are entering a “Darwinian phase” of survival.

Analysts at Galaxy Research, in a note circulated earlier this month, argued that the digital asset treasury sector has reached a saturation point. The downturn has effectively halted the “flywheel” strategy popularized by MicroStrategy, where firms issued equity at a premium to fund aggressive crypto acquisitions.

Real-time data from Bitcoin Treasuries indicates the fallout is widespread: approximately 65% of public companies with Bitcoin on their balance sheets are now underwater on their positions.

The Flywheel Breaks

The “Darwinian phase” described by Galaxy refers to the collapse of the equity premium. For much of 2024 and early 2025, shares of Bitcoin-holding companies traded at a significant markup to the net asset value (NAV) of their crypto holdings. 

This allowed them to sell “expensive” stock to buy “cheap” Bitcoin, accretively boosting value for shareholders. That dynamic has reversed. 

With the market correcting, many of these stocks now trade at a discount to their Bitcoin NAV.

“The same financial strategies that amplified gains have now amplified losses,” Galaxy Research noted. With the premium evaporated, the issuance machine has stalled, leaving companies to rely on operating cash flow to service the debt they took on to acquire the coins.

Metaplanet and the Underwater Majority

The sell-off has been particularly punishing for late entrants. Japanese firm Metaplanet, often touted as “Asia’s MicroStrategy,” is facing severe pressure.

According to portfolio estimates, the firm is sitting on an average cost basis of approximately $108,000 per Bitcoin with spot prices hovering in the mid−$80,000s, the firm is deep underwater. 

Consequently, Metaplanet has paused its once-aggressive Bitcoin purchases for ten consecutive weeks, reportedly shifting capital toward stock buybacks in an attempt to stabilize its equity valuation. Similarly, health tech firm Semler Scientific is grappling with an estimated cost basis near $95,000, leaving its treasury strategy in the red.

Strategy’s Bitcoin Defensive Pivot

Even the sector’s bellwether is adjusting its stance. While MicroStrategy (MSTR) remains profitable on its total holdings, accumulated since 2020, its Q4 2025 purchases averaging ~$102,000 are currently carrying unrealized losses.

In a move signaling a shift from pure offense to defense, MicroStrategy CEO Phong Le recently defended the creation of a $1.44 billion cash reserve. The fund is designed to cover debt obligations and dividends for the next 12 to 24 months, insulating the company from the need to sell Bitcoin during a prolonged downturn.

“Our business model is to securitize Bitcoin,” Executive Chairman Michael Saylor said in a recent webinar, reiterating that the company has no plans to sell. However, the stockpile acknowledges that the capital markets window, where MSTR raised billions by selling stock, has temporarily closed.

Chain Street’s Take

The tide has gone out, and we’re seeing who bought Bitcoin with conviction and who bought it with cheap credit. The “Darwinian phase” isn’t just a catchy headline but a cleanup of the cap table. 

Companies like MicroStrategy built a war chest to survive exactly this kind of volatility. The copycats who leveraged up at $110,000 hoping for a quick moonshot? They are about to learn that volatility cuts both ways. 

The “corporate HODL” is easy when “number go up”; now comes the real test of institutional diamond hands.