The post MSTR, SMLR Lead Crypto Names Lower appeared on BitcoinEthereumNews.com.

Crypto stocks suffered a red day on Friday, especially bitcoin treasury companies such as Strategy (MSTR) and Semler Scientific (SMLR) — each down roughly 6% even as bitcoin slipped only a bit more than 2%. Japan-listed Metaplanet is lower by 24%. The picture looks even worse when zooming out: changing hands at $376 early Friday afternoon, MSTR shares are more than 30% below their all-time high hit late in 2024 even as bitcoin has pumped to a new record this week. The price action comes amid a continuing debate taking place on social media about the sustainability of Michael Saylor’s (and those copycatting him) bitcoin-vacuuming playbook. “Bitcoin treasury companies are all the rage this week. MSTR, Metaplanet, Twenty One, Nakamoto,” said modestly well-followed bitcoin twitter poster lowstrife. “I think they’re toxic leverage is the worst thing which has ever happened to bitcoin [and] what bitcoin stands for.” The issue, according to lowstrife, is that the financial engineering that Strategy and other BTC treasury firms are employing to accumulate more bitcoin essentially rests on mNAV — a metric that compares a company’s valuation to its net asset value (in these cases, their bitcoin treasuries). As long as their mNAV remains above 1.0, a given company can keep raising capital and buying more bitcoin, because investors are showing interest in paying a premium for exposure to the stock relative to the firm’s bitcoin holdings. If mNAV dips below that level, however, it means the value of the company is even lower than the value of its holdings. This can create significant problems for a firm’s ability to raise capital and, say, pay dividends on some of the convertible notes or preferred stock it may have issued. Shades of GBTC Something similar happened to Grayscale’s bitcoin trust, GBTC, prior to its conversion into…

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Filed under: News - @ May 24, 2025 3:17 am