10X Research: The collapse of the stock price of Bitcoin-related companies has led to losses of approximately $17 billion for retail investors.

On October 18, Bloomberg reported that a recent research report shows that retail investors attempting to indirectly invest in Bitcoin through digital asset holdings companies like Metaplanet and Michael Saylor's Strategy have estimated losses of $17 billion. These losses primarily stem from excessive equity premiums, allowing these companies to issue stocks at prices far exceeding the actual value of their held encryption assets. Currently, the stock prices of these companies have completely collapsed, trapping a large number of retail investors. “The era of financial magic for Bitcoin holding companies is coming to an end,” wrote a 10X Research analyst in a report released on Friday. The report, titled “After the Magic: How Bitcoin Holding Companies Must Evolve Beyond the Net Asset Value Illusion,” points out that retail investors “have actually lost about $17 billion, and new shareholders have paid an additional $20 billion premium for Bitcoin risk exposure.” The author uses Strategy as an example, noting that the company's stock price is currently only 1.4 times its Bitcoin holdings value, significantly down from past premium levels of 3-4 times. The strategy of most Bitcoin holding companies is quite simple: issue stocks at a premium above net asset value, and use the price difference to buy Bitcoin, repeating this cycle. Researchers noted that Metaplanet's market capitalization once soared to $8 billion with a $1 billion investment in Bitcoin, then fell to $3.1 billion, while its Bitcoin holdings value is $3.3 billion. “In this process, shareholders lost $4.9 billion in market capitalization, while the company successfully accumulated $2.3 billion in Bitcoin—this is a 'feat' worth applauding,” the report stated. The report emphasizes that the compression between market capitalization and stock prices is worth noting. These companies now need to find new ways to survive. Researchers believe that Bitcoin holding companies must break free from relying on “overinflated” net asset values to buy Bitcoin and shift towards operations more like arbitrage-driven asset management companies. Although this may reduce Bitcoin's upward potential, the ability to adapt to the new model will determine these companies' profit prospects.