Roughly 228 publicly traded companies have now piled into what’s known as Digital Asset Treasury strategies, collectively directing an estimated $148 billion into crypto holdings. A fund manager is warning that the sheer scale of this corporate Bitcoin bet, combined with deteriorating balance sheet metrics across the sector, could set the stage for a significant price correction.

The concern centers on a simple but uncomfortable math problem: a growing number of these treasury firms are trading below the market value of their actual Bitcoin holdings, and some of them used leverage to get there.

The treasury playbook that worked, until it didn’t

The corporate Bitcoin treasury strategy was pioneered by Strategy, formerly known as MicroStrategy, back in August 2020. The playbook was straightforward: raise capital through equity offerings, debt, and convertible instruments, then use that capital to buy Bitcoin instead of holding cash reserves.

For Strategy, the results were nothing short of spectacular. The company’s stock has risen over 2,200% since its first Bitcoin purchase. Japan’s Metaplanet, which adopted a similar approach in 2024, reported gains exceeding 3,800%.

The number of public companies running some version of this strategy ballooned to 228 by 2025. Many of these newer entrants are smaller, less capitalized, and more reliant on continued Bitcoin price appreciation to justify their balance sheets.

The mNAV problem

The key metric to watch here is something called mNAV, or market net asset value. It compares a company’s stock market valuation to the actual value of the Bitcoin sitting on its balance sheet. When mNAV drops below 1.0, it means the market is valuing the company at less than its Bitcoin is worth.

Approximately 15% of DAT firms now trade below a mNAV of 1.0. For these companies, the usual capital-raising playbook breaks down. If your stock is already trading at a discount to your assets, issuing new shares to buy more Bitcoin is dilutive and self-defeating. And if you used debt to fund earlier purchases, you’re staring at obligations that don’t shrink when Bitcoin’s price does.

The result is a cohort of companies that may be forced to sell Bitcoin to meet liquidity needs, precisely at the moments when selling pressure is already elevated.

Why the $150B number matters

The $148 billion sitting in corporate treasuries is significant not just for its size but for how it interacts with the broader Bitcoin market. Spot Bitcoin ETFs have also approached $150 billion in assets under management, meaning institutional exposure to Bitcoin through both corporate treasuries and fund products now represents a massive concentration of capital.

That dual exposure creates a feedback loop. When Bitcoin drops, treasury firms see their balance sheets deteriorate, which pressures their stock prices, which limits their ability to raise new capital, which can force liquidations. Meanwhile, ETF holders who watch the same price action may redeem shares, creating additional sell pressure on the underlying Bitcoin.

Michael Burry, the investor known for his prescient bet against the US housing market before the 2008 financial crisis, has noted that declines in Bitcoin’s value may signal broader institutional de-risking.

What this means for investors

Investors should watch three things closely: the percentage of DAT firms trading below mNAV of 1.0, the pace of new capital raises across the sector, and Bitcoin ETF flow data for signs of institutional redemptions.