The golden age has ended: Bitcoin 'banks' enter a brutal purification era.

At one point, Bitcoin fund management companies were regarded as the "unstoppable giants" of the digital asset market. Each growth cycle of BTC became a catalyst that pushed their stock prices higher, while the commitment to hold a massive volume of Bitcoin made balance sheets from New York to Tokyo shine with confidence and expectation.

However, that "honeymoon period" has now come to an end. As we enter September, the market landscape has become more intense than ever, exposing the shortcomings in business models, the limitations in risk tolerance, as well as the increasingly rising anxiety from investors.

As a result, many companies can no longer hold the former glory: stock prices have plummeted, fund premiums have decreased, and the position of "Bitcoin bank" that seemed solid is now being severely challenged.

NAKA: The stress test no one wants

The most striking example is NAKA stock. In just 10 days, its value plummeted by nearly 35% during the session and continues to fluctuate wildly. The volatility has become even more tense as the option prices soared, while the overall market gradually slid into a bearish trend.

David Bailey – CEO of NAKA – candidly shared on X:

"The last time I checked, the IV of the options showed that borrowing costs had skyrocketed to 2,000% – as far as I know, the highest in the country. This means that the market is betting heavily against us."

What truly drives NAKA into the chaotic vortex? The answer certainly cannot be condensed into the phrase "Bitcoin volatility." In fact, NAKA stands at the risky intersection of healthcare and treasury – two sectors that are inherently sensitive to regulation, while also being fertile ground for intense speculative waves in the options market.

When financial leverage is tightened or investor sentiment reverses, the level of volatility becomes increasingly fierce. A clear example is that in recent sessions, the trading volume of NAKA has exploded, while technical indicators continuously flash warnings of an "oversold" condition.

Beyond NAKA: Premiums, mNAV, and S&P 500 Shock

The story does not end with NAKA. In another post, David Bailey candidly stated:

"The entire treasury industry is undergoing a necessary test. Toxic financial models, failed altcoins reborn under the guise of DAT, along with a series of companies lacking plans or vision, have exposed core weaknesses. In fact, even the concept of a 'treasury company' is enough to confuse investors."

According to Bailey, trust is a vital factor. Businesses that do not create real value will soon be discounted by the market or be acquired and eliminated by stronger competitors.

In fact, this situation is spreading. One-third of Bitcoin fund management companies are now trading at or even below the net asset value market (mNAV). This is a red flag for investors: stock prices no longer accurately reflect the actual amount of Bitcoin reserves.

Even the giants cannot escape the negative spiral. Strategy was unexpectedly removed from the S&P 500 index in September, despite a market capitalization of 25 billion USD and a massive amount of Bitcoin held. JPMorgan called this a "strong blow to the entire cryptocurrency company industry." This neglect further raises doubts about the role and risk profile of publicly traded Bitcoin treasury companies.

Meanwhile, the market premium – the additional price that investors are willing to pay to access Bitcoin through fund shares – is plummeting. Treasury companies are also significantly reducing their buying pace compared to a year ago, causing new capital flows to be insufficient to maintain momentum. Investors are beginning to wonder: is this business model still viable in the current difficult environment?

The mNAV index of the Strategy in recent months has only hovered around 1.25. Previously, during periods of intense volatility, this premium level had surged above 2.0 – allowing companies to easily raise funds and purchase more Bitcoin. But now, as volatility has been suppressed and accumulation is gradually slowing, this gap has almost disappeared. If the market does not soon become vibrant again, Bitcoin treasury companies will find it difficult to justify the current valuation.

What will happen next with Bitcoin storage companies?

Bailey believes that the current difficulties are an opportunity for the Bitcoin treasury industry to reset its development trajectory. He emphasized:

"In the fiat money system, the treasury company is essentially a bank. Today, we are building Bitcoin banks. Those who operate well will create thriving assets; those who operate poorly will be undervalued by the market and quickly taken over by those who are more capable."

The core message that Bailey conveys is very clear: organizations must know how to manage their balance sheets in a disciplined and sustainable manner. In this phase, execution is more important than promotion, and real value is more important than the media narrative.

For Bitcoin treasury companies, resilience and transparency will be two vital pillars. Indeed, volatility and instability are certainly not over – and the harsh filtering process continues, not only with NAKA or Strategy, but with the entire ecosystem of "Bitcoin banks" entering a new era.

Taylor