Golden Finance reports that, according to a report by venture capital firm Breed, only a handful of Bitcoin treasury companies can withstand the test of time and avoid falling into the “death spiral”—a vicious cycle that severely impacts those Bitcoin-holding companies whose trading prices are close to their net asset value (NAV, which is total assets minus liabilities).
The report’s author points out that the health of Bitcoin treasury companies depends on their ability to maintain a trading multiple (MNAV) above net asset value. Breed’s report outlines seven stages of decline for Bitcoin treasury companies, the onset of which is typically marked by a drop in Bitcoin prices, leading to a decline in MNAV, which in turn causes the company’s stock price to approach its actual net asset value (NAV).
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