NextFin News - Digital-asset treasury stocks have shed $62 billion since Bitcoin's October 2025 peak, with the combined market value of fully diluted bitcoin-treasury companies falling from about $134 billion to $72 billion - and yet Matt Cole, chief executive of Strive, is calling for a Bitcoin moonshot and insisting the sector is not broken. The tension is the story: a market that has punished treasury firms far harder than the asset they hold is being told the punishment is a buying opportunity, not a verdict.
Cole's comments, made in a September 22 interview, land at a moment when the digital-asset treasury (DAT) trade is under its most serious stress test since the model went mainstream in 2025. Bitcoin has given back a large share of its record gain - trading in the high $70,000s, roughly 38 percent below its $126,000 all-time high set in October 2025 - and several DAT names have fallen 80 percent or more. The question investors are really asking is not whether Cole is optimistic - every treasury chief is long - but whether the mechanism that made these companies work in the bull market still functions in a bear market.
The Sell-Off in Numbers
Start with the arithmetic, because the DAT selloff is not symmetrical with Bitcoin's decline. Since the October 2025 peak, bitcoin has dropped by roughly 38 percent. Over a comparable stretch, the market value of bitcoin-treasury stocks lost $62 billion, a 46 percent decline from $134 billion to $72 billion, according to data compiled by Artemis and reported in June. Individual names have fared worse: Twenty One Capital is down 84 percent over the past year, Metaplanet more than 80 percent, and Nakamoto nearly 100 percent. Strategy, the largest corporate holder, trades at 0.63 times net asset value; Semler Scientific has fallen 74 percent over the same period.
The transmission mechanism behind this asymmetry is market-to-net-asset value, or mNAV - the premium or discount at which a company's equity trades relative to the crypto on its balance sheet. When mNAV sits above 1.0, a treasury company can issue shares at a premium, convert the proceeds into more coins than the dilution it created, and compound bitcoin per share in a self-reinforcing loop. Below 1.0, the flywheel reverses: issuing shares becomes dilutive, the discount widens, and the market starts pricing survival risk rather than accumulation capacity.
That is the line the sector is now dancing on. At least 37 of the top 100 bitcoin-treasury companies trade at discounts to the value of the crypto they hold, per BitcoinTreasuries.net. Strategy and Twenty One Capital - two of the five largest treasuries - each carry roughly a 17 percent discount. Smaller names are deeper in the red: Sweden's H100 Group trades at a 32 percent discount, Vanadi Coffee at 61 percent.
The model's fragility is not theoretical. It was pioneered in August 2020, when Strategy - then known as MicroStrategy - made its first bitcoin purchase and spent years as the only public vehicle offering leveraged bitcoin exposure through equity. That monopoly on structure is what allowed mNAV premiums to persist. The 2025 boom changed that: the number of public companies holding bitcoin grew from 70 at the start of the year to more than 130 by mid-year, and U.S. spot bitcoin exchange-traded funds offered a cheaper, cleaner route to the same asset. When exposure becomes commoditized, the premium for the corporate wrapper is the first thing to go.
Why Cole Says DATs Are Not Broken
Cole's defense rests on a specific claim: the selloff is a cyclical liquidity event, not a structural failure of the treasury model. His evidence is Strive's own ability to keep buying. Strive, which went public through a reverse merger and acquired Semler Scientific in one of the fastest public-market deals on record, has continued accumulating through the downturn. In the week ending September 4, it added 1,375 bitcoin for about $109 million at an average of $79,281 per coin; in a later week it bought 469 more for $36.6 million to reach an even 25,000 BTC. The purchases were funded not by selling common equity at a discount but through preferred securities: Strive's SATA preferred stock has been trading around its $100 par value, giving the company room to raise capital and convert it into bitcoin without the dilution penalty a discounted common-stock issuance would impose.
"It's not out of the realm of possibility for Strive to end the year as the number two largest Bitcoin holder," Cole said on the One Share podcast. "Some things are going to have to go right for that to happen."
Those "things" have a concrete shape. Strive holds warrants Cole put at north of $700 million in notional value, struck at $27 and expiring in mid-October. If ASST holds above that strike and the warrants are exercised, Cole said the proceeds would open capacity for another $700 million of digital credit behind them - roughly $1.4 billion of potential bitcoin-buying power. At holdings of 25,000 BTC, reaching second place would require buying roughly 18,500 additional coins, since Twenty One Capital sits at 43,514 BTC and Strategy leads at 845,050 BTC. Cole called the scenario possible, not his base case.
The setup also contains a short-squeeze element. Cole noted ASST is more heavily shorted than any company in the S&P 500 and framed the run into October's warrant expiry as "the shorts versus the warrant holders," adding that he would "rather have them exercised than not exercised." ASST closed at $22.80 on August 28, below the $27 strike - which is precisely why the next several weeks matter. A move above $27 before mid-October converts paper capacity into actual bitcoin.
The Bear Case: Most DATs Will Not Survive
The counter-thesis is not that Bitcoin goes to zero. It is that the DAT structure itself is a bull-market artifact that cannot survive a prolonged discount environment. Altan Tutar, co-founder and chief executive of crypto yield platform MoreMarkets, put it bluntly: "Going into the next year, I think that the outlook for DATs is looking a bit bleak. Most Bitcoin treasury companies will disappear with the rest of the DATs." His reasoning is mechanical: companies focused on altcoins will be first to fail because they cannot sustain market value above the value of their holdings - the mNAV test.
Ryan Chow, co-founder of Solv Protocol, noted that the number of companies buying and holding bitcoin grew from 70 at the start of 2025 to more than 130 by mid-year, and warned that a bitcoin treasury "isn't a one-stop solution to infinite dollar growth." Many, he said, are "unlikely to survive the next downturn." The survivors, in his view, will be the ones that treat bitcoin as part of a broader yield strategy rather than a passive store of value.
This is the strongest form of the bear argument, and it deserves weight: the DAT boom of 2025 was partly a financial-engineering boom, and engineering that depends on a rising stock price is fragile when the stock falls. The Grayscale analogy is instructive - in 2020 the Grayscale Bitcoin Trust traded at a 40 percent premium because it was the only regulated route for institutional exposure. When spot ETFs arrived, that premium collapsed. DATs face a version of the same risk: if cheaper, cleaner bitcoin exposure exists elsewhere, why pay a premium for a corporate wrapper?
There is also a balance-sheet risk the bulls understate. A treasury company funded with debt or preferreds that carry collateral covenants can be forced to sell bitcoin into a falling market - the exact opposite of the "never sell" doctrine that built the sector's reputation. Once sales begin, the narrative of permanent accumulation breaks, mNAV compresses further, and the cycle feeds itself. This is the mechanism by which a cyclical price decline becomes a structural exit: not because bitcoin failed, but because the funding structure could not withstand the drawdown.
The Second-Order Question the Market Is Not Asking
The first-order read of the DAT selloff is obvious: bitcoin fell, so treasury stocks fell more because they are leveraged to the asset. The second-order question is different: what happens if Cole is right and bitcoin does "go to moon" from here? The answer cuts both ways, and the asymmetry is what makes this interesting.
If bitcoin rallies back toward its $126,000 record, mNAV math says the recovery will be violently non-linear. A company trading at 0.6 times NAV that sees its asset base double does not merely double in equity value; the discount compresses as the survival premium evaporates, and the equity can triple or quadruple on the way up. That is the call option embedded in a distressed DAT - and it is why Cole can advocate buying while others are capitulating. The same non-linearity explains why DAT stocks fell farther than bitcoin on the way down: leverage works in both directions, and a 50 percent decline in the asset can wipe out most of the equity value when the structure is levered.
There is a third-order implication that almost no one is pricing. If the best-capitalized DATs survive and bitcoin resumes a sustained uptrend, the survivors will not merely recover - they will consolidate the sector. Companies trading above 1.0 mNAV can use their premium shares as acquisition currency, buying discounted rivals and absorbing their bitcoin stacks at a profit to the acquirer's per-share holdings. The 2025 boom produced 130 competitors; the next cycle could produce a handful of dominant treasuries, with Strive positioning itself among them through the Semler acquisition and continued accumulation. The DAT model does not die; it concentrates.
Strive's structure is designed around exactly this insight. By funding through perpetual preferreds at par rather than common equity at a discount, Cole is attempting to decouple the company's buying capacity from its common-stock mNAV. Whether that works depends on two variables Cole does not fully control: bitcoin's price path, and whether SATA can stay at par while the notional value climbs past $1 billion. If SATA slips below par, the funding line tightens and Strive faces the same dilution trap as its peers.
Cyclical or Structural? The Call
Here is the judgment the market needs to make, and it is not a comfortable one: this is a cyclical drawdown layered on a structural shakeout. The cyclical leg is the price decline itself - bitcoin down roughly 38 percent from its peak, a magnitude the asset has seen multiple times (2014, 2018, 2022) and recovered from each time. Cyclical drawdowns mean-revert; the buyers at these levels are betting on that historical pattern, and Cole is one of them.
But the structural leg is real and separate: the DAT industry is consolidating, and a large fraction of the 130-odd companies that entered the trade will not reach the next cycle high. That is not a cyclical claim - it is an industry-structure claim, and the evidence is the mNAV dispersion. Companies that can fund at par survive; companies that cannot, disappear. Treating the whole sector as one bet - either "broken" or "not broken" - misses the point. The model is not broken; most of the participants are over-levered to it.
The falsifying signal for the "not broken" thesis is specific and observable: if bitcoin rallies 30 percent from current levels and a majority of the top-20 DATs still trade below 1.0 mNAV, then the discount is structural, not cyclical, and Cole's recovery narrative is wrong. Conversely, if mNAV recovers above 1.0 across the sector on a modest bitcoin rally, the selloff was a liquidity event and the survivors will compound rapidly.
What to Watch
Three signals over the next 90 days will separate the cyclical read from the structural one. First, ASST's price relative to the $27 warrant strike into mid-October: exercise converts $700 million of notional into real buying power, and a failure to reach the strike leaves Cole's $1.4 billion capacity as theory. Second, whether SATA and comparable DAT preferreds continue trading at par - the funding line that keeps the flywheel turning without dilution. Third, mNAV across the top 20 treasuries: a move back above 1.0 on a bitcoin rally confirms the cyclical thesis; continued sub-1.0 trading confirms the bears.
Scenarios: In the base case, bitcoin grinds back toward $90,000 by year-end - a level prediction markets currently price at 44 percent probability - and the best-capitalized DATs recover modestly while weaker names continue to fade. In the bull case, the warrant exercise triggers a short squeeze, Strive's accumulation accelerates, and mNAV compression sends leading names sharply higher. In the bear case, bitcoin retests $55,000 - which prediction markets assign an 87 percent probability of happening at some point before year-end - and the discount dynamic forces a wave of dilution or failures among the most exposed treasuries.
The closing line: the DAT selloff is not a referendum on whether bitcoin treasury strategies work - it is a stress test of who funded them well enough to survive the answer. Cole's bet is that Strive did, and that the market is about to find out he was right. Whether he is depends less on his conviction than on a $27 stock price, a $100 preferred, and a cryptocurrency that has never respected anyone's timeline.
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