Bitcoin proxy bets through treasury firms wipe out 17 billion losses

TLDR

Retail investors lost $17B chasing Bitcoin exposure via treasury firms.
Metaplanet and Strategy stocks dropped up to 50% during Bitcoin’s fall.
Treasury firms traded 40–50% above Bitcoin value before the crash.
Losses were concentrated among investors in the US, Japan, and Europe

Retail investors chasing Bitcoin exposure through corporate treasury stocks have seen $17 billion erased in a few months. The idea of owning Bitcoin through public companies such as Metaplanet and Strategy (formerly MicroStrategy) seemed safer and simpler. But when Bitcoin’s rally cooled and valuations corrected, these stocks fell twice as hard, leaving investors with steep losses and a harsh reminder about indirect exposure.

The Rise of Corporate Bitcoin Treasuries

During Bitcoin’s surge in late 2024 and early 2025, several firms adopted the “digital asset treasury” model. They used company balance sheets to buy large amounts of Bitcoin, pitching themselves as accessible Bitcoin proxies. Strategy, led by Michael Saylor, became the symbol of this movement, inspiring others like Japan’s Metaplanet to follow the same approach.

According to 10X Research, by mid-2025 dozens of small and mid-cap firms had rebranded around their Bitcoin holdings. Investors bought these stocks to gain exposure without managing digital wallets or using exchange-traded funds. However, the equities began trading at large premiums—sometimes 40% to 50% higher than their actual Bitcoin per-share value. Analysts at Bloomberg described this as “a shift from Bitcoin exposure to exposure to crowd psychology.”

When Valuations Collapsed

The turning point came in October 2025 when Bitcoin fell about 13%. The decline triggered amplified losses in these treasury firms. Strategy’s stock dropped nearly 35% from its peak, while Metaplanet lost over half its market value. The corrections erased most of the summer’s speculative gains and deepened retail losses.

10X Research reported that retail portfolios tied to these digital asset treasuries collectively lost around $17 billion since August. The losses were concentrated among individual investors in the United States, Japan, and Europe. The research described the situation as a “proxy trade gone wrong,” where enthusiasm replaced sound valuation metrics.

Why the Proxies Failed

The core issue was valuation drift. As Bitcoin prices climbed, investors bid up treasury stocks far beyond their intrinsic Bitcoin holdings. When sentiment turned, the same leverage worked in reverse, magnifying declines. These companies were effectively leveraged plays on Bitcoin, funded through debt and equity issuance.

Bitcoin was designed for self-custody and decentralization, yet retail investors found themselves holding corporate intermediaries again. “Equity wrappers for digital assets are not substitutes for the assets themselves,” the 10X Research report stated. The ease of buying shares through stock exchanges came at the cost of higher risk and volatility.

The Broader Market Response

Bloomberg noted that this event could reshape how retail participants approach crypto-related equities. Traders who saw these companies as safer Bitcoin alternatives were reminded of the difference between holding Bitcoin directly and owning companies that speculate on it.

Market data show that after the sell-off, some professional traders began shorting overvalued Bitcoin treasury stocks while going long on Bitcoin itself. Analysts described this as a rebalancing phase, where valuation gaps between equity proxies and spot Bitcoin began to narrow.

This episode also renewed focus on exchange-traded funds and regulated Bitcoin products, which many now see as more transparent vehicles for exposure. For many retail investors, the $17 billion loss serves as a clear warning about the cost of convenience and the risks of treating speculative equities as Bitcoin substitutes.

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