The corporate Bitcoin treasury playbook, the one that turned MicroStrategy into a Wall Street darling and spawned hundreds of imitators, may be approaching its stress test. A fund manager is warning that Bitcoin could face meaningful downside pressure as the roughly $150 billion that public companies have collectively allocated to Bitcoin creates new risks the market hasn’t fully priced in.

The copycat treasury boom

Since 2025, over 200 publicly traded companies have raised approximately $150 billion to buy Bitcoin for their corporate treasuries. The model was pioneered by Strategy, formerly known as MicroStrategy, led by Michael Saylor, who became the de facto evangelist for treating Bitcoin as a corporate reserve asset.

The pitch was simple. Cash loses value to inflation, Bitcoin appreciates over time, so why not swap one for the other on your balance sheet? Companies raised capital through equity offerings and convertible debt to fund their purchases, and for a while, it worked beautifully.

Investors rewarded these firms with premium valuations, stock prices that exceeded the value of their underlying Bitcoin holdings. That premium, in turn, made it easy to issue more equity at favorable prices and buy even more Bitcoin.

Premiums evaporate, cracks appear

VanEck’s Matthew Sigel warned in June 2025 about potential “capital erosion” risks for Bitcoin-heavy corporate treasuries. His concern wasn’t theoretical. It was grounded in observable market dynamics.

By late 2025, roughly one-quarter of treasury firms were trading at discounts to their Bitcoin holdings. When a company trades at a premium to its Bitcoin, it can issue new shares and use the proceeds to buy more Bitcoin at an effective discount. When it trades below that level, the mechanism breaks. Issuing equity at a discount to its net asset value dilutes existing shareholders and destroys value.

Acquisition activity among Bitcoin treasury companies has slowed significantly as premiums have diminished and market conditions have tightened.

Why forced selling could hit Bitcoin

Many of these firms funded their Bitcoin purchases with convertible debt. Those instruments have maturity dates and conversion prices. If a company’s stock is trading below its conversion price, holders won’t convert to equity. They’ll want their cash back. And if the company doesn’t have the cash, it may need to liquidate Bitcoin to meet obligations.

The smaller and more heavily leveraged players are the ones most exposed. A company like Strategy, with its scale and market access, has more room to maneuver. A $200 million market cap company that went all-in on Bitcoin with convertible notes and now trades at a 20% discount to its holdings faces a different situation entirely.

Sigel’s warning about asset valuation compression and liquidity challenges points directly at this scenario. If multiple treasury firms hit funding walls simultaneously, the resulting selling pressure could amplify downward moves in Bitcoin. The dynamic mirrors what happened with Grayscale’s Bitcoin Trust before it converted to an ETF. GBTC traded at steep discounts to its net asset value for years, creating forced selling from arbitrage funds and leveraged players. The scale here is potentially larger, with $150 billion in corporate Bitcoin allocations across hundreds of entities.

What this means for investors

Investors should be paying close attention to the capital structures of individual Bitcoin treasury companies. The ones trading at discounts to their holdings, carrying significant convertible debt, or showing signs of liquidity stress are the canaries in the coal mine.

What makes this particularly tricky for traders is the reflexivity of the setup. If Bitcoin drops, treasury company valuations drop further, widening discounts, increasing the pressure to sell, which pushes Bitcoin lower still. That feedback loop doesn’t require a macro shock to activate. It just requires premiums to stay compressed long enough for debt obligations to come due. And that clock is already ticking.