Key Takeaways

• Issuing shares near NAV provides no upside for shareholders and may erode trust in management.
• Capital raised without a return premium turns into a liability over time.
• Firms must implement safeguards that automatically prevent harmful issuance.
• As BTC becomes more mainstream, equity strategies must reflect mature financial stewardship, not speculative accumulation.

Bitcoin’s march into the corporate treasury has been lauded as visionary. From Strategy’s headline-making playbook to newer entrants like Metaplanet and Semler Scientific, the idea of replacing cash reserves with Bitcoin has sparked both excitement and capital inflows. 

But a stark warning from VanEck’s Matthew Sigel is prompting investors to ask a critical question: What happens when the math no longer adds up?

Public companies holding Bitcoin have benefited from significant premiums over their net asset value (NAV), enabling them to issue shares at elevated prices and use the proceeds to buy more BTC. However, as this premium erodes, a likely scenario as more firms adopt the strategy and Bitcoin becomes less novel, these equity raises risk turning from a capital formation tool into a vehicle for value erosion.

Why Trading Bitcoin Near NAV Spells Trouble

When a company’s stock trades well above its NAV, it can issue shares at a premium, effectively using other people’s money to accumulate more Bitcoin. 

But when its share price drops to match the NAV, essentially the market value of its Bitcoin holdings, issuing new stock becomes problematic. As Sigel warns, doing so at or near NAV doesn’t create new value; it dilutes existing shareholders without increasing per-share asset value.

This is not theoretical anymore. 

Semler Scientific (NASDAQ: SMLR) recently traded at exactly 1x NAV. That means the market values the company solely for its BTC, with no added premium for its operational business or strategic direction. Issuing new shares under these conditions would simply redistribute existing Bitcoin across more hands, eroding the value of each share.

Sigel likens this to capital erosion, not formation, a concept that cuts to the heart of shareholder risk in the Bitcoin treasury model.

Semler and Metaplanet: The Dilution Warning in Action

Semler Scientific began acquiring Bitcoin aggressively in 2024, reaching over 4,846 BTC by July 19, 2025. But its share price hasn’t kept pace with Bitcoin’s bullish trajectory. Down more than 45% from its yearly highs despite BTC holding near $100,000, the company’s market cap now closely mirrors the value of its digital assets.

The risk? 

If Semler continues issuing stock to buy more Bitcoin without a NAV premium, it only amplifies dilution. Shareholders aren’t getting more value, they’re getting a smaller slice of the same pie.

Metaplanet, the Tokyo-based software company turned Bitcoin proxy, has followed a similar trajectory but on a larger scale. With 16,352 BTC on its books (July 19, 2025) and a 2,000% rally in its share price since 2024, it looks like a success story. 

But VanEck points out that the firm’s current valuation implies Bitcoin prices would need to reach $700,000 per coin to fully justify its market cap, a level far beyond today’s $100K territory.

If Metaplanet’s premium compresses or investor appetite wanes, the firm too could find itself unable to issue accretive equity, sliding into the same trap as Semler.

Eroding Premiums: A Systemic Concern?

As more companies jump on the Bitcoin treasury bandwagon, competition for the same investor capital intensifies. What was once novel, offering BTC exposure via traditional equities, is rapidly becoming normalized.

The result? 

Share premiums over NAV are already shrinking. Sigel and other analysts believe this is not a short-term dip, but a structural compression that reflects maturing investor expectations. Issuing shares without a significant NAV buffer becomes increasingly dangerous in this context.

What Bitcoin Treasury Companies Can Do About Equity Erosion

VanEck’s warning is not merely critical; it’s prescriptive. Sigel outlines a number of practical measures that companies can adopt to protect long-term shareholder value:

• Automatic issuance pauses: Firms should commit to halting at-the-market equity offerings if their shares trade below 0.95x NAV for more than 10 consecutive trading days. This rule-based approach prevents dilution during vulnerable periods and signals fiscal discipline to the market.
• Use stock buybacks strategically: If Bitcoin rallies but the company’s share price lags, management should consider repurchasing stock instead of buying more BTC. This can close the valuation gap and restore per-share value, assuming market sentiment isn’t outright bearish.
• Consider strategic alternatives: In cases where NAV discounts persist, companies may need to think bigger, through mergers, spin-offs, or even an exit from the Bitcoin treasury strategy. These options should not be seen as admissions of failure, but as adaptive financial governance.
• Align executive pay with real value: Sigel stresses that executive compensation should be tied to NAV per share growth, not the raw number of Bitcoins held or the volume of shares issued. This creates the right incentives for long-term value creation rather than short-term market hype.
  

Optionality Is Fading and its Time for Discipline

Bitcoin treasury strategies offer a bold way to integrate digital assets into corporate finance, but they come with strings attached. As premiums compress and markets mature, companies can no longer rely on speculative valuations to fund long-term strategy.

VanEck’s Matthew Sigel sums it up best: Boards and shareholders need to act with discipline now, while they still have the option to do so. If they fail to implement safeguards, the Bitcoin treasury model could shift from innovation to cautionary tale.

For companies that want to lead in the Bitcoin economy, the message is clear: build your balance sheet, but not at the expense of your shareholders.

FAQs

Why is trading near NAV a problem for Bitcoin treasury companies?

When a company’s stock trades near its NAV, it loses the ability to issue equity at a premium. This means new share issuance adds no new value and simply dilutes existing shareholders.

Can issuing shares ever be good for Bitcoin treasury firms?

Yes, but only if the stock trades above NAV. This allows the company to raise capital at a premium, which can be used to buy more BTC and increase NAV per share.

Is this a problem for all Bitcoin-holding companies?

Not necessarily. It becomes problematic when companies repeatedly issue equity without maintaining a NAV premium or without using safeguards to prevent dilution.

What should investors look for when assessing Bitcoin treasury stocks?

Check the current NAV per share, the premium or discount to market price, recent issuance activity, and whether executive compensation is aligned with per-share growth.

Are there alternatives to holding Bitcoin through public equities?

Yes. Investors can gain direct exposure to BTC through spot ETFs, crypto IRAs, or regulated platforms offering custodial services—often with greater transparency and less dilution risk.