The latest crypto market pullback has revived doubts about the resilience of corporate Bitcoin treasury strategies, but Matrixport researchers say the biggest player, Strategy, still looks positioned for potential inclusion in the S&P 500.
Although skeptics continue to question whether Strategy’s model can survive major downturns, analysts argue that a forced, large-scale Bitcoin liquidation by the company—the largest corporate holder of the asset—is not a “near-term risk,” according to a Matrixport research note published Wednesday.
Instead, they say the real strain is being felt by shareholders who bought in at a heavily inflated net asset value (NAV) and are now bearing the brunt of the company’s sharp NAV compression.
Even after its share price slid from a high of $474 to roughly $207, Strategy may still be on track for possible S&P 500 inclusion in December, the report added.
“When overlaid with Bitcoin, the shares now appear relatively cheap, and the possibility of S&P 500 inclusion in December still exists.”
However, investors should treat this as an important reminder of the importance of “timing and valuation” when it comes to investments, the report added.
Crypto market intelligence firm 10X Research has also forecast a 70% probability that Strategy will be added to the S&P 500 by year-end, according to an Oct. 29 report from Cointelegraph.
Strategy recently received a “B-” credit rating from S&P Global Ratings, placing it in speculative, non-investment-grade territory typically associated with “junk bonds.” It is the first Bitcoin-treasury-centric company to earn an S&P Global assessment, setting a potential benchmark for evaluating other firms with sizable crypto holdings.
Smaller crypto treasuries struggle as mNAV declines
Despite the optimism around major players, concerns continue to mount over the stability of smaller digital asset treasuries (DATs). Several companies have seen their market net asset value (mNAV) drop below key thresholds this year, restricting their ability to raise capital for further Bitcoin accumulation.
The mNAV ratio measures a firm’s enterprise value relative to its crypto holdings. A value above 1 enables companies to issue new shares to fund additional digital asset purchases, while values below 1 make capital expansion significantly more difficult.
A number of DATs have slipped below this critical level, including Strategy, Bitmine, Metaplanet (MTPLF), Sharplink Gaming (SBET), Upexi (UPXI), and DeFi Development Corp (DFDV).
While smaller treasury-focused firms are beginning to feel the strain of the market correction, Strategy’s executive chairman Michael Saylor says he remains unfazed by the possibility of another major Bitcoin downturn.
“The company is engineered to take an 80% to 90% drawdown and keep on ticking,” Saylor said in a Tuesday interview with Fox Business.
Strategy recently disclosed a purchase of 8,178 Bitcoin worth $835 million—its largest acquisition in months and a sharp increase from the firm’s typical pace of 400–500 BTC purchases over the past month.
