10X Research: The collapse of Bitcoin-related stocks has caused retail investors to lose approximately $17 billion

ChainCatcher news, according to Bloomberg, the latest research report shows that retail investors attempting to indirectly invest in Bitcoin through digital asset holding 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 cryptocurrency holdings.

The stock prices of these companies have now completely collapsed, leaving many retail investors deeply trapped. "The era of financial magic for Bitcoin holding companies is coming to an end," wrote analysts from Singapore's 10X Research in a report released on Friday. The report titled "After the Magic: How Bitcoin Holding Companies Must Evolve Beyond Net Asset Value Illusions" pointed out that retail investors "have actually lost about $17 billion, while new shareholders paid an additional $20 billion premium for Bitcoin risk exposure."

Using Strategy as an example, the author noted that the company's stock price is currently only 1.4 times its Bitcoin holding value, a significant drop from the previous premium levels of 3-4 times. The strategies of most Bitcoin holding companies are quite simple: issue stocks at a premium above net asset value and use the price difference to purchase Bitcoin, repeating this cycle.

Researchers pointed out that Metaplanet's $1 billion investment in Bitcoin once skyrocketed its market value to $8 billion, which then fell to $3.1 billion, while its Bitcoin holding value is $3.3 billion. "In this process, shareholders lost $4.9 billion in market value, while the company successfully accumulated $2.3 billion in Bitcoin—this is a commendable 'feat'," the report stated.

The report emphasizes that the compression between market value and stock price is a cause for concern. These companies now need to find new ways to survive. Researchers believe that Bitcoin holding companies must move away from relying on "inflated" net asset values to purchase Bitcoin and shift towards operations more akin to arbitrage-driven asset management companies. While this may reduce Bitcoin's upside potential, the ability to adapt to the new model will determine these companies' profit prospects.