77% Of Bitcoin Treasury Firms Are Underwater—Highest Since 2023

Bitcoin's corporate backers are feeling the squeeze. A whopping 77% of public companies holding Bitcoin on their balance sheets are now sitting on unrealized losses—the highest proportion since the crypto winter of 2023.

The Paper Loss Pile-Up

It's a classic case of corporate FOMO meeting market reality. Firms that jumped on the Bitcoin treasury trend during the bull run are now watching their digital asset reserves bleed red ink on quarterly reports. The accounting department's favorite euphemism—'unrealized loss'—doesn't make the red numbers any less real to shareholders.

Buy High, Hold Low

The strategy was simple: buy Bitcoin, hold it as a treasury reserve asset, and wait for appreciation. What could go wrong? Turns out, timing matters. Many of these corporate acquisitions happened at prices far above current levels, creating a significant anchor on balance sheets. It's the corporate equivalent of buying a yacht at high tide and watching the water recede.

The Institutional Waiting Game

Now comes the real test of conviction. Do these firms double down, averaging into their positions like retail degens? Or do they quietly write down the assets and hope nobody notices? The next earnings season promises some creative accounting gymnastics—just another day in finance where 'long-term vision' often means 'we bought at the wrong time.'

Seventy-seven percent underwater. For Bitcoin maximalists, it's a buying opportunity. For corporate treasurers, it's a reminder that volatility cuts both ways—and the market doesn't care about your balance sheet.

Over 77% Of Bitcoin Treasury Firms Are Underwater On Their Buys

As pointed out by Capriole Investments founder Charles Edwards in a new post on X, a high amount of Bitcoin treasury companies are sitting on losses at the moment. Treasury companies refer to firms that keep BTC on their balance sheet as a reserve asset. Companies of this type that are publicly traded do so to allow their investors indirect exposure to the digital asset via their stock.

The approach was popularized by Michael Saylor’s Strategy (previously MicroStrategy), which has amassed a humongous Bitcoin stack after its consistent accumulation over the years. During the past few months, BTC has observed a bearish shift, so these firms have naturally been impacted. Below is the chart shared by Edwards that shows the trend in the percentage of such companies that are underwater on their BTC buys.

As is visible in the graph, the total percentage of Bitcoin treasury firms in loss has gone up recently, with its value today sitting at 77.4%. Thus, it would appear that a strong majority of the companies have their holdings below their cost basis. This includes Strategy, which has an average acquisition level of $75,985, more than 12% above the current spot price.

A large percentage of the firms are in even worse losses than Strategy. In the same chart, data for the treasuries with holdings sitting more than 20% below their cost basis is also displayed. It would appear that this metric has a value of 65.6%, implying that less than 12% of the underwater companies are in losses smaller than 20%.

From the graph, it’s also apparent that the recent trend in the treasury firms resembles that of May 2022, when the bear market of that year was in full swing. Back then, the percentage figure eventually went on to touch even higher highs.

Like how public treasury companies provide for an indirect route into Bitcoin, there is also another such indirect means in the market available today: the spot exchange-traded funds (ETFs). These funds buy and hold the asset on behalf of their users, allowing them to get exposure to BTC’s price movements without having to deal with blockchain elements.

The bearish market shift also caused the US spot ETFs to face net outflows, as data from SoSoValue shows. During the last couple of weeks, however, inflows have poured into these funds, implying that demand for Bitcoin may be starting to return.

BTC Price

Bitcoin has retraced its recovery during the past few days as its price is back at the $67,600 mark.