The Dilution Trap: What Happens to Bitcoin Per Share When Issuing Stock Below 1.0x mNAV

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Each Monday, you'll receive a quick blast on the top buyers over the last week. We'll follow that up every Friday with digest and analysis. Enjoy!

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Full November Bitcoin Treasury Damage Report

November may have been the first true stress test of the Bitcoin capital markets era, as what began as a month of guarded optimism gave way to sharp volatility as Bitcoin’s price broke below $90,000 – defying prior cycle patterns and exposing just how aggressively many corporates chased this year’s rally.

The November edition of the BitcoinTreasuries.net Corporate Adoption Report quantifies this impact across public companies using Bitcoin as a balance sheet tool, distilling the data into more than 100 charts and slides.

Our headline finding: in a sample of 100 companies where cost basis can be reliably measured, an estimated 65% bought Bitcoin above current market prices, leaving a clear majority of these treasuries with unrealized losses.

The Dilution Trap: How Issuing Stock Below 1.0x mNAV Destroys Bitcoin Per Share

Just last week, Strategy executed a transaction that reveals a structural tension in the Bitcoin treasury model. 

The company issued 5.1 million common shares at 0.847x mNAV, which means that Michael Saylor’s firm sold equity worth $0.85 per dollar of Bitcoin to buy Bitcoin at $1 per coin. That amount resulted in Strategy adding 9,062 Bitcoin to the treasury in November, while its total holdings grew to 650,000 Bitcoin. 

Enthusiasts far and wide celebrated the accumulation, especially in lieu of the current market stress striking at Bitcoin’s price. 

But the mathematics show that every existing shareholder now owns slightly less Bitcoin per share than before the transaction, despite Strategy buying more total coins. 

This reveals a challenge that emerges when mNAV compresses below 1.0x, one that becomes more prescient now that 65% of reported Bitcoin treasuries are sitting with billions in unrealized losses after buying above $100,000. And more companies may face similar tradeoffs between maintaining accumulation velocity and preserving per-share value. 

The math is pretty straightforward. When a treasury trades at 0.847x mNAV, each dollar of market capitalization corresponds to $0.847 of Bitcoin value on the balance sheet. This means that issuing new shares at this valuation only raises $0.847 of Bitcoin purchasing power per $1 of dilution, while buying Bitcoin at market price still costs $1.00. 

Put differently, issuing stock at 0.847x mNAV creates a 15.3% inefficiency (1 − 0.847) in Bitcoin accumulation: for every $1 of equity issued, the company can acquire only $0.847 of new Bitcoin. Strategy raised $928 million through these discounted common stock sales, which funded November’s 9,062 BTC purchase.

But because shares were issued below NAV, the company’s Bitcoin per share declined despite total Bitcoin holdings increasing, introducing tension with Strategy’s stated goal of maximizing “BTC yield.” 

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To assess whether this is sound strategy ultimately boils down to perspective. 

Bulls might argue that total Bitcoin accumulation matters more than per-share metrics in the long run — if Bitcoin reaches $200,000 or more, today’s dilution at $90,000 becomes noise compared to the value created by holding more coins. 

Bears could counter that issuing equity at discounts to NAV violates basic corporate finance principles. As Peter Duan of The Bull Standard notes: “Investors buy Bitcoin treasury companies because they want more Bitcoin per share, earned through intelligent financing, not recycled by selling the core asset.”

Both perspectives have merit depending on an investors’ time horizon and their conviction in Bitcoin’s trajectory.

Strategy’s command over the total accumulated by treasuries during November reveals the scale gap during its mNAV compression. The company accounted for approximately 75% of all November treasury buying (9,062 BTC of 12,644 BTC gross purchases), while the other 99 tracked companies combined contributed just 25%. 

This concentration could signal healthy consolidation as the strongest operators continue executing while weaker players pause, or it could indicate dependency on one company’s capital markets access. Mining companies, meanwhile, contributed approximately 680 BTC — or 5% of November additions — despite holding 12% of all public treasury Bitcoin, demonstrating that operational production provides steady but limited accumulation compared to capital markets-based models.

The alternatives to dilutive common stock issuance each carry distinct tradeoffs. Strive, the #2 buyer in November with 1,567 BTC added, funded purchases through SATA preferred equity issuance rather than common stock dilution. This preserves Bitcoin per share but creates fixed dividend obligations — SATA pays 12% annually, requiring consistent cash generation or additional capital raises to service those obligations. The company has a years-worth of dividend coverage in dollars.

Metaplanet launched share buybacks when trading below 1.0x mNAV, reasoning that buying undervalued stock increases Bitcoin per share more efficiently than buying Bitcoin at market prices. 

All of this comes at a time when the entire sector faces a broad slowdown in accumulation as premiums fade and Bitcoin’s price drops. 

Our latest November report saw net additions of just 10,761 BTC (after accounting for sales from five companies including Sequans’ 970 BTC reduction), making it the lowest month of 2025. Q4 is projected to reach approximately 40,000 BTC added — returning to levels similar to Q3 2024 and down dramatically from earlier 2025 quarters. 

As John Fakhoury, CEO of Stacking Sats, observed: “A large chunk of Bitcoin treasury companies now trade below the value of the Bitcoin they hold. The premium era is over. We’re entering a phase where only disciplined structures and real business execution will survive.”

Meanwhile, there’s a valuation debate that extends beyond simple mNAV calculations. 

“The continued use of mNAV has created a quiet but persistent distortion. It's appropriate for passive balance-sheet businesses—but fundamentally incomplete for companies that produce revenue and profit,” said Roy Kashi, CEO of Falceonedge.

“The question remains: When will Bitcoin treasury companies be valued for their enterprise, not just their balance sheets?” 

This philosophical divide separates treasuries that view themselves as pure Bitcoin proxies from those emphasizing operational businesses alongside treasury strategies.

Strategy’s shift from primarily preferred equity issuance to 96% common stock issuance in December — although perhaps a one-off — suggests the company chose dilutive issuance as the least problematic path among imperfect options this time. 

Whether other treasuries follow this approach or pursue alternatives like Strive’s preferred equity or Metaplanet's buybacks will determine which models prove sustainable. 

As Wyatt O’Rourke of Basilic Financial notes: “If you are an executive at a Bitcoin treasury company, you need to be extremely clear about the story you want to tell. If you're not deploying like MSTR, you shouldn't expect the market to value your stock the same way."

The transaction reveals tensions inherent in treasury models when stock valuations compress below underlying asset values, forcing companies to make difficult tradeoffs between growth and dilution.

Special thanks to our partners:

• AnchorWatch. AnchorWatch makes Bitcoin ownership safer and easier by combining advanced custody expertise with industry-grade insurance. As a Lloyd’s of London Coverholder, it writers specialized policies that address digital-asset risks, giving clients trusted coverage and peace of mind. Learn more: AnchorWatch

• Arch Lending. Get instant, secure loans backed by your Bitcoin, Ethereum, or Solana—no need to sell your assets. Arch Lending offers fast approvals and trusted custody for both individuals and institutions. Learn more: Arch Lending

• Cadena Bitcoin. A p2p bitcoin lending marketplace with a unique emphasis on working with treasury firms and businesses, as well as the savvy bitcoin-native investors who visit our website. Learn more: Cadena Bitcoin

• Coinkite. Coinkite is a leader in security and hardware manufacturer and the maker of some of the most iconic Bitcoin products, such as OPENDIME, COLDCARD, BLOCKCLOCK, SATSCARD, TAPSIGNER and SATSCHIP. Learn more: Coinkite

• Cryptio. Cryptio is an enterprise-grade accounting software platform built specifically for digital assets and cryptocurrencies. It enables businesses to transform blockchain transaction data from multiple exchanges and custodians into auditable financial records, supporting compliance with GAAP and IFRS standards. Learn more: Cryptio

• The Hemisphere Foundation. Hemisphere develops open-source solutions designed to help treasury teams securely manage, deploy, and optimize their BTC holdings, withe benefits of self-custody and Bitcoin native deployment. Learn more: The Hemisphere Foundation

• Orange Wheel Advisors. Orange Wheel Advisors is a strategic consulting firm that helps companies navigate Bitcoin’s impact on corporate finance and competitive strategy. With expertise spanning treasury management, payments, capital structure, mining, and investor communications, they provide executive education, tailored strategies, and execution support to guide businesses through the global monetary transition. Learn more: Orange Wheel Advisors

• o21 Solutions. o21 develops and implements Bitcoin-powered corporate strategy, transforming value chains with strategic expertise and tailored advisory services, with a focus on both Treasury and Operations - balance sheet accumulation, mining, and payments. Reduce cycle time through the corporate Bitcoin adoption journey through our pre-packaged or tailored engagements. Learn more: o21 Solutions

• Psalion. Psalion is a Bitcoin and digital-asset yield manager that offers institutional‑style investment strategies to professional investors, family offices, corporates, and private clients via separately managed accounts and yield funds. Learn more: Psalion

• Secure Digital Markets (SDM) provides unparalleled liquidity, execution speed, and bespoke customer service, making it the top choice for institutional investors seeking reliable digital asset trading solutions. With deep expertise in capital markets and strict regulatory standards, SDM stands out as the premier platform for all digital asset treasury teams looking to optimize their trading and treasury operations. Learn more: Secure Digital Markets (SDM)

• Stacking Sats Inc. Official IT partner at BitcoinTreasuries, Stacking Sats Inc via its subsidiary, Framework IT, is a managed IT services firm with a 17-year track record of providing bet-in-class IT support, strategy, and cybersecurity, boasting high recurring revenue and long-term client contracts. It’s also one of the top 20 holders of Bitcoin among global private companies. Learn more: Stacking Sats Inc

• XCE. A executive recruitment group that combines a profitable recruitment business with a Bitcoin treasury strategy. The company turns over a decade of executive recruitment experience and four years of Bitcoin accumulation into a public Bitcoin‑powered growth engine, using a proven operating business to drive Bitcoin treasury accumulation. Learn more: XCE

• Zaprite. Zaprite is a non-custodial payment platform that allows individuals and businesses to seamlessly accept both bitcoin (on-chain and lightning) and fiat payments in a unified, customizable checkout experience. Users can easily issue invoices, generate payment links, and connect multiple wallets or custodial accounts, all while handling their own funds directly. Learn more: Zaprite

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