Retail buyers lost $17 billion on Bitcoin hype after stock crash

Retail investors lost an estimated $17 billion trying to gain Bitcoin exposure through digital asset treasury firms like Metaplanet and Michael Saylor’s Strategy, according to a new research report. These losses came from an overpricing of share premiums that allowed these companies to sell shares for far above the value of their actual crypto holdings. Those share prices have now collapsed, leaving a host of individual investors behind. “The era of financial magic is ending for Bitcoin treasury companies,” analysts at Singapore-based 10X Research wrote in a report released Friday. Retail investors “effectively lost about $17 billion, and new shareholders overpaid an estimated $20 billion for Bitcoin exposure,” according to the report, titled “After the Magic: How Bitcoin Treasury Firms Must Evolve Beyond NAV Illusions.” As evidence, the author noted the stark reality of Strategy: shares of the firm now trade at just 1.4 times the value of its Bitcoin holdings, down from premiums that were three or four times the value in the past. The strategy of most Bitcoin treasury firms has been a fairly simple one: sell shares at a premium to the company’s net asset value, use the spread to buy Bitcoin, rinse, repeat. From a $1 billion investment in Bitcoin, Metaplanet’s market value rose to $8 billion before falling to $3.1 billion while holding $3.3 billion in Bitcoin, the researchers noted. “In the process, shareholders lost $4.9 billion in value, while the company managed to accumulate $2.3 billion worth of Bitcoin — an achievement worthy of applause,” they wrote. This compression between market value and share price is cause for concern, according to the report. What these businesses need now, they say, is a new approach to survive. In their view, Bitcoin treasury companies should move away from paying their Bitcoin with “inflated” NAVs to operate more like arbitrage-driven asset managers. While this may reduce Bitcoin’s upside potential, the ability of a Bitcoin treasury firm to adapt to this new model is what will make or break their bottom line. “The smarter DAT firms will still be able to generate 15–20% annual returns,” researchers wrote. ©2025 Bloomberg LP This article was generated from an automated news agency feed with no text modifications.