As summer transitions to fall in the northern hemisphere, the aspiration among stonkcoiners to integrate Bitcoin into the financial landscape is increasingly being viewed as a disillusionment. The era of Bitcoin paper summer, characterized by the issuance of shares at substantial overvaluations in the financial markets for the purpose of acquiring Bitcoin at lower prices, appears to be concluding not with a notable success but rather with modest and lackluster outcomes.

The vision of a Bitcoin treasury was appealing and, in some respects, held a degree of credence.

For a period, Wall Street engaged exuberantly with this trend, contributing to its momentum. However, financial realities are now reasserting themselves. The collective awakening from this temporary dalliance with financial fantasy is marked by a realization that many assets were trading at values greater than their intrinsic worth. It is both a welcome and a regrettable sight to witness traditional corporate finance regain its footing.

Yet, this notion of a free lunch proved to be an illusion, leading to significant losses for investors—an arduous lesson learned.

I absolutely hate seeing the stock price go down of course- many of my closest friends and family are shareholders. But I can’t control the market.

What I can do is work for the best interest of shareholders and execute our strategy dutifully. Together we’ll build a massive… https://t.co/kEIokoUwev

— David Bailey $1.0mm/btc is the floor (@DavidFBailey) September 4, 2025

For retail investors, purchasing securities rather than actual Bitcoin often comes at a premium, typically reflected in a market NAV (mNAV) exceeding 1. This scenario, while seemingly irrational—why invest more than the actual dollar value—serves as the driving force behind these Bitcoin treasury enterprises.

Critics had anticipated a correction in mNAVs to approximate 1, achieved either through declining share values or stagnant pricing while Bitcoin’s fiat price appreciated. Instead, market dynamics unexpectedly crashed the Bitcoin price, exacerbating the decline of many of these tenuous financial constructs.

NAKA, under Bailey’s purview, has exemplified this cycle of distress. Following the announcement of a $5 billion share issuance program last month, the stock price plummeted by approximately 30% and continued to decline, marking a total drop of 70% since its initial surge related to the reverse merger with KindlyMD. The stock has depreciated by a staggering 85% from its peak in May, reaching a new low of $3.28.

Market prices represent reality, and the current state at the conclusion of the phenomenon surrounding treasury companies illustrates that aggregating retail-funded equity and debt to acquire Bitcoin does not lead to the anticipated rewards.

“The market price tells you whether you’re right or wrong,” remarked Moshe Shen, managing director at APAC Wintermute Trading, during the recent Bitcoin Asia event held in Hong Kong. This sentiment conveys skepticism regarding the future prospects of Nakamoto and various Bitcoin treasury companies.

The Demise of Bitcoin Treasury Strategies

The recurrent cycles of pump-and-dump associated with the issuance of shares tailored for Bitcoin treasury strategies no longer produce significant surges in share prices; rather, they decline in accordance with sound corporate financing principles. Despite the large quantities of Bitcoin acquired, as demonstrated by Saylor’s strategy, the stock price of MSTR continues on a downward trajectory, having yielded zero returns for common shareholders since November of the previous year. Similarly, Metaplanet, which recently boasted of surpassing 20,000 Bitcoin, has witnessed its stock price regress to levels not seen since the onset of the Bitcoin paper summer.

Nikou Asgari from the Financial Times expressed a poignant critique of the treasury strategy, noting that it hinges on capital procurement via share issuance or debt accumulation to fund Bitcoin purchases, which, in turn, is predicated on the hope of driving share price appreciation. She highlights that diminished company valuations complicate capital raising efforts.

As share prices decline and mNAVs gravitate closer to 1, the illusory momentum of free capital generation dissipates. The true viability of the numerous treasury companies in existence will soon be tested in the aftermath of the funding boom.

Raising Capital is not a sustainable business model. Try this, "Hi I am looking to raise capital for my business. Oh, what is the business? Capital raising."

There is a rare, extinct type of business which required endless capital raising. https://t.co/hVdHoEm699

— Josh Man (@JoshMandell6) September 7, 2025

Tyler Evans of UTXO Management, another entity linked to BTC Inc and Nakamoto, echoed this sentiment, acknowledging the irrational exuberance of the market and identifying the paper Bitcoin summer as a peak in both hype and the number of newly launched companies, as conveyed to Asgari in the aforementioned FT article.

As the paper Bitcoin summer draws to a close, reality is reclaiming its stake, effectively correcting the collaborative misunderstanding of market prices across the world’s most liquid markets.

A bold prediction can be made: Within a year, Bitcoin treasury companies are unlikely to remain viable. Most of the lesser enterprises may not endure and will likely divest the large quantities of Bitcoin they hastily acquired. Those with a robust competitive advantage and proficient management, such as Strategy or Metaplanet, might persist but will see their mNAV reduced to slightly above zero, which aligns with realistic valuations.

The paper Bitcoin summer has concluded, and the author expresses anticipation for the disappearance of these ventures back to the realms of illusion from which they emerged.

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