Bitcoin Suddenly On The Brink As ‘Death Spiral’ Price Crash Nightmare Is Coming True

Bitcoin has seen its massive price rally stall in recent months, with the bitcoin price failing to make gains in 2025 (though a $25 trillion challenge to gold could be around the corner).

Sign up now for CryptoCodex—A free crypto newsletter that will get you ahead of the market

The bitcoin price is only slightly higher than the near-$110,000 per bitcoin it reached in December even after a year that’s seen bitcoin and crypto embraced by Wall Street and the White House.

Now, as Tesla billionaire Elon Musk issues a stark $37 trillion warning, Nakamoto, the bitcoin treasury company led by David Bailey, has suffered a 50% share price crash in what could be the start of a bitcoin price “death spiral."

Sign up now for the free CryptoCodex—A daily five-minute newsletter for traders, investors and the crypto-curious that will get you up to date and keep you ahead of the bitcoin and crypto market bull run

Forbes‘We’re Toast’—Tesla CEO Elon Musk Issues Serious $37 Trillion Warning As Fed Bitcoin Price Boom PredictedBy Billy Bambrough

Nakamoto, which was founded this year to follow in the footsteps of Michael Saylor’s Strategy to bitcoin-based stock market riches, has suffered an almighty share price crash, with its 50% Monday rout taking its loses from its late May peak to 95%.

Nakamoto, trading under the ticker Naka, merged with healthcare company Kindly MD in August before buying almost 6,000 bitcoin for around $700 million and outlining plans to buy more via stock sales and debt issuance.

At one point, Nakamoto traded at more than 20 times the value of its bitcoin holdings. However, that has declined to a multiple-to-net asset value, or mNAV, of just 0.7, compared to an mNAV of 1.2 for Strategy, according to data from BitcoinTreasuries.net.

An mNAV of 1 implies a company market capitalization of equal to its underlying asset price, while a higher mNAV means the company is trading at a premium to its holding and a lower mNAV means it's trading at a discount. In Nakamoto's case, the company is currently worth less than the bitcoin it holds.

In June, venture capital company Breed warned of a bitcoin price “death spiral” if companies that failed to maintain mNAVs of over 1 were forced to sell their bitcoin.

"New treasury companies face this risk even more acutely [than Strategy]," Breed researchers wrote in a report.

“Without Strategy’s scale, reputation, and passive index inflows, they will likely raise capital on tougher terms and at higher leverage ratios. In a downturn, those aggressive structures could accelerate margin calls and distressed bitcoin sales, amplifying downside pressure across the market.”

Strategy—which began buying bitcoin in 2020—has seen massive success, being inducted into the Nasdaq 100 last year after buying 638,000 bitcoin worth around $73 billion.

However, Strategy’s share price has plunged almost 30% since its July peak, with its own mNAV more than halving from a recent high of 3 in November last year.

Sign up now for CryptoCodex—A free crypto newsletter that will get you ahead of the market

ForbesTrump Issues ‘Big’ Fed Prediction As ‘Take Over’ Fears Threaten Bitcoin And Crypto Price ChaosBy Billy Bambrough

Bailey, a bitcoin advisor to U.S. president Donald Trump and organizer of the bitcoin conference where Trump first proposed building a U.S. bitcoin strategic reserve, has sought to dismiss fears the company could implode, posting to X during yesterday's stock price plummet that, "The only way out is through," and calling it "critical" that the company builds “an aligned shareholder base.”

Earlier this week, Bailey warned in a shareholder letter that more volatility could be on the way and, "shareholders who have come looking for a trade, I encourage you to exit."

Bailey has also blamed Nakamoto’s struggling stock price on the flood of crypto treasury companies that have seen most major coins and some smaller ones be adopted by companies aiming to become "the Strategy of" different cryptocurrencies.

"The treasury company moniker itself is confusing,” Bailey posted to X. "Toxic financing, failed altcoins rebranded as DATs [digital asset treasuries], too many failed companies with no plan or vision. It’s totally muddled the narrative."