The wave of public Bitcoin treasury companies that have emerged in 2024 and 2025 is structurally fragile in a way that the Strategy/MicroStrategy original was not. The original had a real, if modest, operating business that produced steady cash flow through every prior drawdown. Most of the imitators do not. Many are mid-cap shells whose primary economic activity is the Bitcoin stack itself, with the operating business serving more as accounting cover than as genuine countercyclical income. The 2026-2027 bear market will sort the durable from the disposable, and the sorting will be unkind.
The basic mechanics of the playbook only work above NAV. Issuance accretes BTC-per-share when the equity premium is positive; below par, additional issuance is dilutive on a coin-adjusted basis and the flywheel reverses. Strategy's premium has been resilient through multiple drawdowns because investors trust the operating business and the management's longer track record. The newer entrants — Metaplanet, Smarter Web Company, ProCap, KULR Technology, the various smaller European and Asian listings — have neither the operating depth nor the institutional credibility to defend their premiums under stress. When sentiment turns, their premiums will compress faster and recover more slowly.
The dataset on previous bull-bust cycles is informative. The 2018 wave of Bitcoin-treasury-adjacent listings — most of them focused on mining or generic crypto-asset-management — produced over a dozen public failures across 2019 and 2020, including several that delisted and a handful that filed for bankruptcy protection with significant unrecovered shareholder capital. The 2022 cycle was kinder, partly because most of the speculative issuers had already failed. The 2026-2027 cycle promises to be uglier than 2018, simply because the 2024-2025 issuance wave was larger, more leveraged, and more concentrated in shell-style entities than any prior cohort.
The institutional case for the durable operators is more interesting. Strategy itself has done meaningful structural work — extending convertible-debt maturities, building genuine balance-sheet cushion, diversifying its capital-markets relationships — that reduces but does not eliminate its drawdown exposure. Several mid-tier U.S. and European entrants have built operating businesses that, while small, generate enough cash flow to service debt and avoid forced selling. Those companies will probably survive the next cycle in shape to compound through the recovery. The shell-style entrants — entities whose primary 2025 economic activity was buying BTC with issued capital — will not.
The defenders of the imitator wave argue that the market-cap weighting of the category is dominated by a handful of credible operators, that most of the smaller-cap shell entrants are too small to materially affect the broader thesis, and that the playbook has now been validated enough that even mediocre execution can survive a moderate drawdown. There is a fair point about cap-weighting; the largest names do dominate. The objection is that the smaller-cap failures will produce headline risk that taints the broader category, even when the structural exposure is concentrated in companies that are too small to matter on their own. Reputation contagion in capital markets is real, and the imitators will produce more of it than the boosters expect.
The next twelve to eighteen months will probably produce one or two cautionary-tale bankruptcies in the category. The signs to watch are NAV-premium compression on the smaller-cap names, forced sales of BTC at unfavorable prices to meet operating obligations, and the emergence of class-action shareholder lawsuits at the entities that took on the most aggressive leverage. None of those signals will surprise anyone who has watched a crypto bear market before. The industry should be prepared for the headlines and the regulatory aftermath that will follow them. Choose your treasury-strategy exposure carefully, and don't confuse the original with its copies.