A recent report from firm 10x Research has raised alarms about the viability of corporate crypto-asset treasuries, highlighting a massive BitMine’s unrealized loss. Markus Thielen, founder of the consultancy, warns that the business model of these entities faces existential risks due to deteriorating valuations and imminent institutional competition. The analysis suggests that investors could remain trapped in inefficient financial structures while the market evolves toward more competitive products.
BitMine Immersion Technologies, identified in the report as the world’s largest corporate holder of the asset, is currently in a delicate financial position. The company faces a drop of 1,000 dollars for every token purchased, translating into a cumulative deficit of 3.7 billion dollars on its total holdings. Tracking data indicates the firm holds approximately 3.56 million tokens, valued at roughly 10.7 billion dollars, but with a high average cost basis of 4,051 dollars. This situation has caused the value of its shares to fall below the value of the assets it custodies.
Will the treasury model survive the efficiency of the new exchange-traded funds?
The deterioration of net asset value (mNAV) is at the core of the current problem for these companies. BitMine’s basic mNAV has dropped to 0.77, making it extremely difficult to expand capital by issuing shares. Thielen describes this scenario as a “Hotel California,” where existing investors are trapped unable to get out without suffering significant damage. Unlike regulated funds, Digital Asset Treasuries (DATs) often impose complex and opaque fee structures that quietly erode returns, making the model unsustainable when the market premium disappears.
On the other hand, competitive pressure is intensifying with moves from Wall Street giants. BlackRock has taken the first step to register a staked Ethereum ETF in Delaware, which would drastically change the rules of the game. This new product could offer a low-cost source of yield, eliminating the hidden fees associated with traditional treasuries. The economics of DATs will face increasing scrutiny, as investors will likely prefer clear management fees of 0.25% over the costs and risks embedded in current corporate structures.
Looking ahead, capital is likely to start aggressively reallocating toward these new institutional investment vehicles. If BitMine’s unrealized loss and the low valuation of its assets persist, the company and others like Strategy or Metaplanet will struggle to justify their existence to shareholders. The arrival of products that generate yield efficiently and regularly could mark the end of the corporate treasury era as the primary avenue for institutional exposure, forcing a complete restructuring or the obsolescence of the sector.
