Over the past two years, companies such as MicroStrategy have epitomized the so-called 'Bitcoin treasury' strategy by issuing large amounts of new shares to raise capital and continuously accumulate Bitcoin. However, as Bitcoin retreated from its highs and the effects of equity dilution compounded, investors are no longer blindly supporting corporate Bitcoin purchases. A clear valuation inversion has emerged: the market value of Bitcoin held by these companies now lags behind their cumulative acquisition costs, while per-share value has eroded due to dilution, triggering a crisis of confidence among shareholders.
The core reason for this model's failure is that investors have begun to rationally assess the long-term damage of equity dilution. When the bullish case for Bitcoin weakens, share issuance for purchases turns into a tool that harms existing shareholder value. Several companies that aggressively hoarded Bitcoin are now seeing their share prices under pressure, forcing management to consider adjusting their strategies or reducing purchases.