Investors are increasingly scrutinizing Bitcoin treasury companies as enthusiasm for the sector cools, according to David Bailey, CEO of KindlyMD and leader of the company’s Bitcoin accumulation strategy. The market currently hosts 205 publicly listed Bitcoin treasury companies, but several have seen their market net asset values (mNAVs) plunge, signaling that investors are distinguishing between firms with real strategic advantages and those merely following the herd.
“The market’s getting more sophisticated, it’s learning how to assess what makes treasury companies different,” Bailey told CNBC.
Bitcoin Treasuries Need a Unique “Edge”
Bailey stressed that new Bitcoin treasury firms should pursue truly unique approaches. “It’s kind of like, what’s the edge? Why are you needed?” he said.
During periods of market euphoria, Bailey noted, both strong and weak companies tend to emerge, but the weaker firms often struggle when volatility hits. With Bitcoin down nearly 10% over the past seven days, the weaknesses of non-differentiated treasuries have become more apparent.
Bailey added that new entrants should avoid replicating strategies already executed by public firms. “There are so many companies that the market can bear doing the exact same thing,” he explained.
Strategies to Stand Out
Several paths exist for Bitcoin treasury firms to differentiate themselves:
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Targeting untapped international markets where digital asset adoption is still emerging.
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Specializing in specific asset categories, such as Michael Saylor’s approach of entering the credit market.
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Acquiring and consolidating operating businesses to generate steady cash flow alongside Bitcoin accumulation.
Bailey’s own firm, Nakamoto Holdings, merged with healthcare company KindlyMD on August 14, creating a publicly traded Bitcoin treasury vehicle with plans to accumulate 1 million BTC.
However, KindlyMD’s stock has seen substantial volatility, including a 55% drop in a single day on September 15, and currently trades around $0.76. Bailey cautioned shareholders about continued price swings in the near term.
Is the Bitcoin Treasury Sector a Bubble?
The broader market is debating whether Bitcoin treasuries represent a bubble. Despite a total of $113.8 billion held by public Bitcoin treasuries, some firms have experienced significant mNAV compression.
Standard Chartered recently warned that saturated markets are the primary driver of declining valuations, leaving smaller firms vulnerable to risk. Similarly, VC firm Breed predicts that only a handful of Bitcoin treasury companies will survive long-term, with weaker firms potentially entering a vicious “death spiral.”
Glassnode’s lead analyst James Check added that the lifespan of the Bitcoin treasury strategy may be shorter than expected. “For many new entrants, it could already be over,” he remarked.
Despite these concerns, others in the industry see promise. TON Strategy CEO Veronika Kapustina noted that while indicators suggest a bubble, Bitcoin treasuries represent a new segment of institutional finance, highlighting innovation within the market.
Market Outlook: Only Strong Treasuries Will Prevail
Bailey believes the market is entering a phase where the strongest Bitcoin treasury companies will dominate, pushing the sector into a healthier, more sustainable state.
Firms that can differentiate themselves—through strategic acquisitions, market expansion, or specialized assets—are more likely to maintain investor confidence and long-term viability.
With rising scrutiny and market volatility, investors are prioritizing companies with clear advantages rather than those relying solely on Bitcoin accumulation. This shift is expected to weed out weaker players and solidify the position of top-performing treasuries in the years ahead.
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