Bitcoin has held up strongly compared to the companies that have adopted it as part of their treasury strategy, but the gap between the digital asset and these firms is becoming more pronounced.
Over the last 10 weeks, stocks of Bitcoin Treasury Companies (BTCTCs) have fallen sharply, shedding between 50% and 80% of their value. This divergence shows an unusual pattern, effectively creating a “1:4 ratio” in cycle behavior.
Related Reading
12 Mini-Bear Markets In 18 Months
Bitcoin’s price action in the past 18 months has mostly been in a bullish cycle on the macro end, with the leading cryptocurrency creating new price highs upon new price highs within this period. This has caused an increase in many companies adopting a Bitcoin treasury strategy in their balance books, also known as Bitcoin Treasury Companies (BTCTCs).
However, according to data from crypto commentator Mark Moss, the stock prices of companies with a Bitcoin strategy have diverged from Bitcoin, shedding between 50% and 80% of their stock value over the last ten weeks. This divergence, Moss noted, shows an unusual 1:4 cycle ratio where corporate Bitcoin holders undergo four mini-cycles for every one Bitcoin market cycle.
The Japanese firm MetaPlanet is the prime case study for this occurrence. Over the last 18 months, its stock ($MTPLF) has gone through 12 distinct drawdowns, ranging from sharp single-day plunges to prolonged declines stretching over months. On average, these downturns erased 32.4% of value and lasted about 20 days. The shortest correction was a brutal one-day slide of 22.2% in April 2024, while the longest and deepest crash lasted 119 days from July to November 2024, wiping out 78.6%.
The chart below, of MetaPlanet’s stock, shows repeated selloff cycles that appear far more compressed and extreme than Bitcoin’s price corrections in the past 18 months or so.
MetaPlanet Stock Price: Mark Moss on X
Correlation With Bitcoin?
Interestingly, only 41.7% of MetaPlanet’s drawdowns have directly lined up with Bitcoin’s corrections. Out of the 12 mini-bear markets identified, just 5 occurred in sync with BTC’s declines. The majority (7 out of 12) were unrelated to Bitcoin and were instead caused by company-specific factors. According to Moss, these factors include warrant exercises, fundraising activities, and compression of the Bitcoin premium that MetaPlanet trades at compared to its BTC holdings.
The two most severe drawdowns, however, did overlap with Bitcoin volatility. The -78.6% collapse in late 2024 and a -54.4% drawdown both coincided with periods when Bitcoin itself was undergoing corrections. These overlapping events suggest that while BTC volatility sometimes adds to the drawdown, MetaPlanet’s stock selloffs tend to extend beyond Bitcoin downturns.
Essentially, what this means is that instead of BTC 4-year cycles, BTCTCs are now more like 4 cycles in 1 year.
At the time of writing, Bitcoin is in a correction phase and is struggling to hold above the $110,000 support level. Popular BTCTC stocks are also struggling with downtrends alongside Bitcoin. Strategy’s stock is down 37.1% from its 52-week high, while MetaPlanet is down 58.6%. Others, like The Smarter Web Company PLC (-83.6%) and The Blockchain Group (-70.7%), are at greater losses.
BTCTC Stock Prices: BitcoinTreasuries
Related Reading
Featured image from Unsplash, chart from TradingView
Credit: Source link
