After a strong start, Bitcoin treasury companies are now facing a slowdown, with one in four trading below their BTC holding. According to David Bailey, CEO of Nakamoto Holdings, the industry is being tested due to too many failed altcoins rebranding as Digital Asset Treasuries (DATs).
Bailey’s comments come days after his company’s shares plunged 54% in 24 hours and over 90% over one month. This is a week after its PIPE shares unlocked, allowing insiders to sell their stock.
While Bailey is bullish about the future of Nakamoto and other bitcoin corporate treasuries, he acknowledges the damage done by the increasing number of failed companies in the sector. He points to “toxic financing, failed altcoins rebranded as DATs, too many failed companies with no plan or vision” as the reason for the current challenges.
“It’s totally muddled the narrative. The treasury company moniker itself is confusing,” he posted on X.
Bitcoin as a treasury hedge
Bailey says Bitcoin treasury companies are the future of finance. He goes on to further suggest that these companies are to Bitcoin what banks are to the fiat system.
“Today we are building Bitcoin banks,” he shared. “If you’re afraid of that term, call them Bitcoin financial institutions.”
Not everyone agrees with Bailey on this assessment though. Rob Hadick, a general partner at Dragonfly, a $4 billion crypto VC firm, says he doesn’t see Bitcoin treasury companies as a long-term value bet. “These do not fit within our investment thesis and, in most cases, I believe are simply a speculative trade on the sustainability of the premium continuing to exist for long enough for investors to trade out of them,” Hadick added.
As if on cue, investors have cooled on DAT companies. Bitcoin exchange-traded products saw their first monthly net outflows in over 5 months, according to Grayscale’s August report. Nakamoto wasn’t the only treasury company to see its share prices crash. Strategy also saw a sharp 25% decline from its July 2 Grayscale’s
This hasn’t shaken Bailey’s faith in Bitcoin as a treasury hedge. In a letter to shareholders, he said the decline was not unusual and that the stock crash would be valuable in “establishing our base of aligned shareholders.”
The altcoin drag
Despite Bitcoin trading at all-time highs, the recent failures in the altcoin space are casting a shadow on treasury assets. A number of high-profile collapses, like algorithmic stablecoins, have made institutional investors wary of incorporating Bitcoin into their wider investment strategies.
This has created a negative perception and could significantly slow down Bitcoin’s adoption as a treasury reserve, even as demand from corporate balance sheets continues to grow.
Many investors believe that the recent altcoin failures could also prompt regulators to restrict the sector. While Bitcoin is generally viewed by regulators as a commodity, ASIC and other agencies continue to scrutinise the space broadly under the umbrella of “digital assets”.
As a result, high-profile enforcement actions against altcoin issuers can create the perception that crypto remains overly risky. In such a scenario, most institutional investors may reduce their exposure to avoid complicating internal risk assessments.
Many executives also tend to be hesitant to propose the idea to their boards. That’s because most still don’t grasp the gap between Bitcoin, which has operated reliably for more than a decade, and smaller altcoin projects that have recently imploded. They just see the headlines and volatility and lump it together as cryptocurrency.
The framing by the media doesn’t make this any easier. When Bitcoin slumps, stories often try to tie that to broader crypto crashes even when the underlying catalysts are specific to a particular altcoin. As a result, exposure to Bitcoin treasuries can do more harm than good to your reputation.
This was especially evident in 2022, when Bitcoin’s price halved amid cascading failures of altcoin-linked platforms. While the slump was worrying to many investors, the narrative painted Bitcoin as part of the contagion, rather than a victim of it.
Bailey appears to suggest that the bigger problem isn’t the altcoins themselves but the increasing number of failed crypto treasury companies with poor strategies. Despite the current slowdown, he argues that shorting Bitcoin treasury companies might be the one bet you don’t want to make.
Corporate bitcoin adoption falls 95% since July
Despite Bitcoin vaulting to a record high of over $124,000 (A$188,000) as recently as August 14, 2025, treasury stocks have cooled. According to recent data from CryptoQuant, the number of companies adopting Bitcoin as a reserve asset has plunged 95%.
This trend is worrying to analysts. Many believe that the accumulation of Bitcoin by public companies has been a key driver for Bitcoin’s bull run. According to Bitcoin Treasuries, public companies hold over 1 million BTC, and over 3.7 million BTC is held by BTC-TCs.
If Bitcoin prices start to slump, it can spell doom for many Bitcoin treasury companies. Many are unprofitable and rely on gains from their Bitcoin holdings to stay solvent.
The road ahead
The road to Bitcoin’s full acceptance as a treasury reserve asset will likely be uneven. Altcoin failures are not going away, and this means more collapses are inevitable.
The main challenge is decoupling Bitcoin’s narrative from these failures. Until that happens, Bitcoin’s treasury dominance will remain constrained, its potential muddied by the broader market’s excesses.
The narrative is not going to go away any time soon. Still, Bailey believes Bitcoin treasury companies are here to stay. He advises firms to focus on building and monetising their balance sheet. “If you can do it well, you will grow your assets over time,” he said. But he is also quick to offer a stark warning. Companies that do this poorly will end up trading at a discount and will be consumed.
