Public companies with significant Bitcoin investments are confronting valuation risks as stock prices approach or dip below the net asset value (NAV) of their cryptocurrency holdings. Industry experts warn this trend threatens shareholder value and necessitates enhanced corporate safeguards.
Semler Scientific exemplifies this risk, with its stock plunging over 45% despite broad Bitcoin market gains. The company’s market capitalization now stands at $434.7 million – below the $404.6 million value of its Bitcoin treasury. This discount highlights vulnerabilities even amid favorable crypto market conditions.
VanEck’s digital assets researcher Matthew Sigel cautions that issuing equity to fund Bitcoin purchases risks shareholder dilution when stocks trade near or below NAV. He recommends companies pause equity-for-Bitcoin programs when their stock trades under 0.95x NAV to prevent value erosion.
Proposed protective measures include prioritizing share buybacks during NAV discounts, conducting regular strategic portfolio reviews, and realigning executive compensation to prioritize NAV growth rather than Bitcoin accumulation.
Analysts stress companies must balance cryptocurrency exposure with disciplined financial governance to avoid overextension and sustain investor trust. The widening gap between market caps and crypto holdings underscores the critical need for adaptable capital strategies among Bitcoin-invested public firms.