To the over 200 companies that ploughed roughly $100 billion into Bitcoin last year, the scheme seemed like a sure thing.

As the price of Bitcoin continued to rise, companies banking the digital asset on their balance sheet could issue more shares to raise capital and buy even more Bitcoin. Many also tapped low-interest debt to help them purchase the soaring asset.

Some of these companies, shored up by Bitcoin’s rallying price, were making so much money that Strategy’s Michael Saylor once called the scheme the “infinite money glitch.”

Now, that’s all changed. The reason?

Bitcoin stopped going up.

“The Bitcoin treasury space is unwinding due to lacklustre demand from investors for shares in Bitcoin and altcoin treasury companies,” Dom Kwok, former Goldman Sachs analyst and co-founder of developer app EasyA, told DL News.

Just this week, one treasury approved a sale of its 7,500 Bitcoin — worth around $503 million — to buy back its own shares and shore up its stock price, while another has received a letter from shareholders demanding that its entire board resign.

The rest of the sector paints an equally glum picture.

Many of these ventures now sit on billions in unrealised losses as Bitcoin’s price has sunk nearly 50% from its October 2025 high.

Barely two of the 193 public companies that hold Bitcoin in their corporate coffers bought Bitcoin in the past week.

Indeed, the Bitcoin treasuries space is in tatters.

Those firms now hold Bitcoin worth about $72 billion, roughly half of their peak value, according to BitcoinTreasuries.net.

What happened?

‘Forest fire’

The treasury model has always been fragile.

“This is very much an expected result,” James Check, a Bitcoin analyst, told DL News. “It will continue, the forest fire will clear a lot of the grift and bad ideas out.”

Though companies banked on investors opting to hold stocks with exposure to digital assets rather than the sometimes clunky underlying asset, investors’ crypto competencies have since evolved, said Kwok.

“Most investors are now sophisticated enough to buy the underlying tokens, so treasury companies that simply buy and hold aren’t as appealing as they once were,” Kwok said.

If they don’t want to buy Bitcoin directly, they can always tap into spot Bitcoin exchange-traded funds, which currently hold around $107 billion worth of the asset, according to DefiLlama.

The digital treasury play also offered investors leveraged exposure to the underlying asset.

A metric called market-to-net-asset value, or mNav, became the niche’s North Star. It told investors how much equity value they’re paying for every $1 of crypto the company holds.

As mNav increased beyond 1, investors would pay more than the underlying crypto was worth. So, 1.5x would mean investors pay $1.50 for every $1 of Bitcoin.

Shares in Strategy, the first and largest publicly listed company to begin investing in Bitcoin, traded at premiums of up to 7 times its Bitcoin holdings during peak euphoria.

But that worked in reverse, too.

As Bitcoin fell, leverage amplified losses.

When premiums collapsed into discounts, investors didn’t reject the underlying asset per se. Instead, they questioned why they needed these vehicles at all.

“It’s not so much due to sentiment, it’s the realisation that the original idea was an unsound one,” Check said.

Mutiny at Empery Digital

The cracks in the Bitcoin treasury model are already spawning shareholder revolts.

On Monday, Tice P. Brown, who owns 9.8% of Empery Digital, publicly called for the immediate resignation of CEO Ryan Lane and the entire board of directors at Empery Digital, the 24th largest Bitcoin treasury.

Empery holds 4,081 Bitcoin worth about $275 million.

Brown is demanding the company sell all its Bitcoin and return the proceeds to shareholders.

The letter comes after management at Empery made Brown a pretty unusual offer, he says. They would repurchase 100% of his stake at a 100% premium to market-to-net-asset-value — a significant premium to the current market price. In exchange, the company demanded he stop his agitation, according to Brown.

Empery’s stock, though, trades at an mNav of 0.59, meaning the Bitcoin it holds is valued at a 41% discount. If an investor owns $100 worth of Bitcoin through Empery shares, they can only sell those shares for $59 on the stock market.

But management offered to pay Brown $100 for every $100 of Bitcoin backing his shares — nearly double what he could get by selling on the open market, he says.

Empery disputes Brown’s account, saying he’s the one who actually initiated the conversation and “initially demanded a significant premium to NAV.”

The company called Brown’s campaign “self-serving” and said it would no longer respond to his statements.

Buried deep in Empery’s response was a more damaging revelation.

The company plans to sell its Bitcoin holdings to buy back company shares in the future, a move that is anathema to the entire treasury movement.

GD Capital sells

Yesterday, Bitcoin treasury GD Culture approved the sale of some or all of its 7,500 Bitcoin — worth around $505 million — to fund a $100 million share repurchase programme.

The publicly traded artificial intelligence and livestreaming firm acquired the Bitcoin just five months ago.

Now, it may sell those holdings to prop up its stock price, which trades well below the assets’ value.

GD Capital, like dozens of other treasury firms, has another big problem.

It is sitting on a 42% unrealised loss on its Bitcoin position, or about $208 million paper loss, according to BitcoinTreasuries.net.

If the company were to sell Bitcoin now, it would take a massive blow to its bottom line.

GD Capital did not immediately reply to a request for comment from DL News.

Last man standing

One company that has managed to stay somewhat afloat is Strategy, which makes up over 99% of all corporate buying these days.

“It’s quite natural to see that capital continues to concentrate on the biggest, most stable players like MSTR in an environment that is rather characterised by tightening financial conditions,” André Dragosch, head of European research at Bitwise, told DL News, referring to Strategy’s stock ticker.

That doesn’t mean investors aren’t pessimistic.

Michael Saylor’s company is the world’s most shorted company, with bearish investors betting against 14% of Strategy’s entire market capitalisation. That means for every $100 of Strategy stock that exists, $14 worth has been borrowed and sold by bears.

Meanwhile, the stock trades at $133, down from $473 just last year.

With the amount levied against it by short sellers, the pressure for it to continue dropping is only growing.

To be sure, a sudden Bitcoin rally could turn their fortunes around.

Yet, analysts have lost confidence that the sector will recover its losses.

Standard Chartered not only expects Bitcoin’s price to fall another 30% to hit $50,000 over the next few months, but the UK bank predicts that the price will just hit $100,000 at the end of 2026 — well below its record high of $126,000 recorded in October.

Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.