The analyst predicted the collapse of the imitators of Strategy

The strategy of increasing companies' capitalization through the formation of corporate bitcoin reserves may turn out to be not as long-lasting as many expect. This opinion was presented by on-chain analyst James Chek.

My instinct is the Bitcoin treasury strategy has a far shorter lifespan than most expect, and for many new entrants, it could already be over.

It's not about a measuring contest.

It's about how serious & sustainable your product & Strategy is to sustain the accumulation.

— _Checkmate 🟠🔑⚡☢️🛢️ (@_Checkmatey_) July 4, 2025

For most new participants in this segment, "everything may already be behind us," he noted.

"It's not about competition in size, but about how serious and sustainable your product and strategy for maintaining savings are," wrote Chek.

According to him, companies that start to copy the Strategy policy of forming a bitcoin treasury through equity and debt capital will find it more difficult to attract it. Investors will prefer earlier followers.

"No one needs a 50th company with a treasury. I think we are already close to the phase of 'prove it to me', when it will be increasingly difficult for an arbitrary firm X to maintain high positions and move forward without a serious niche," Chek believes.

According to BitcoinTreasuries, the number of enterprises holding the first cryptocurrency on their balance sheets has reached 255. In just the last 30 days, their number has increased by 21 companies.

Data: BitcoinTreasuries. In terms of corporate Bitcoin reserves, Strategy leads unconditionally, accumulating 597,325 BTC. The mining company MARA Holdings, which ranks second, holds 50,000 BTC.

Chek agreed with the opinion of Taproot Wizards co-founder Udi Wertheimer that many firms use the bitcoin treasury strategy as a way to make quick profits without understanding its essence.

Agree.

— _Checkmate 🟠🔑⚡☢️🛢️ (@_Checkmatey_) July 4, 2025

"The weak among them can be absorbed at a discount by the strong, and the trend may take on a few more additional directions," added the entrepreneur.

The check noted that the flow of funds into bonds or stocks of companies with BTC reserves is mainly provided by retail investors, whose money is "not infinite." Moreover, Strategy has many more opportunities to attract them compared to a hypothetical "number 300" in the niche, the analyst emphasized.

He struggled to specify the timeline for the collapse of companies in the segment, citing optimistic expectations regarding the price of bitcoin.

Who is the "death spiral" waiting for?

Few companies accumulating digital gold will withstand the test of time and avoid falling into the "death spiral," say specialists from the venture firm Breed.

Businesses that purchase cryptocurrency using borrowed capital and are solely focused on building bitcoin reserves are in a zone of special risk.

These companies require a constant influx of funding. The attractiveness of investments for investors is ensured by a premium to the company's value, which is reflected in the metric Multiple on Net Asset Value (MNAV). The ratio is calculated as the firm's capitalization divided by the dollar value of the cryptocurrency held on the balance sheet.

Data: Breed.

"The market does not reward the company MNAV simply for owning bitcoins. This happens when investors believe that management can reliably increase 'BTC-per-share' faster than they could do it themselves," experts from Breed explained.

The main threat is posed by a prolonged bear market, which will "undermine" MNAV, and the capitalization of companies will approach their net worth (NAV). The need to refinance debts against the backdrop of reduced capital raising opportunities will force a partial liquidation of reserves. Sales will put pressure on the price of bitcoin and may trigger a cascading effect, according to the authors of the report.

Data: Breed.

"New companies with treasuries face this risk even more acutely. Without scale, reputation, and passive index inflows, they are likely to attract capital on tougher terms and with a higher leverage ratio," noted the experts.

However, according to their assessment, the chances of widespread market infection are low, as bitcoin purchases are mostly made with equity capital.

Breed specialists also confirmed Werthheimer's opinion that strong players in the segment will absorb competitors facing problems.

GoMining Institutional Managing Director Fakhul Miah expressed concern about the rapid expansion of imitators of Strategy in an interview with Cointelegraph.

"There are currently other companies attempting to create bitcoin banks without proper security measures or risk management. If these smaller firms fail, we may see a ripple effect that could harm the image of cryptocurrency," he stated.

Let us remind you that analysts at Coinbase Institutional have identified the growing popularity of corporate bitcoin reserves as one of the main systemic risks for the market.