When the "infinite money printing" mechanism collapses: Strategy and BitMine fall into despair

The corporate crypto treasury market has just experienced a week marked by contradictions between ambition and reality. Two giants—Strategy (formerly MicroStrategy) and BitMine, the largest treasury companies focused on Bitcoin and Ethereum—continue to accumulate digital assets on a massive scale. However, these transactions are not signs of strength but steps into a risky path.

On December 8th, Strategy announced the purchase of an additional 10,624 BTC valued at $962.7 million—its largest weekly expenditure since July. At the time of writing, Bitcoin is trading at $91.84K with a 24-hour increase of +1.21%. This transaction occurred against the backdrop of the company’s stock, MSTR, having lost 51% of its value compared to the previous year, currently trading at $178.99. Similarly, BitMine added 138,452 ETH to its assets, with Ethereum currently valued at $3.15K and a 24-hour increase of +1.85%.

The Cracks in “Infinite Money Error”

Contrary to common understanding, these buy-in deals do not reflect the confidence of the leaders. Instead, they are symptoms of the collapse of a financial mechanism that once created prosperity for these companies.

Strategy’s economic model is based on a vicious cycle: issuing shares at a premium over the actual asset value (premium), using this capital to buy Bitcoin at market price, thereby increasing the value of each share. This math only works when the market is willing to pay extra fees to access crypto through corporate stocks. Strategy’s current premium NAV is around 1.15 times, while BitMine’s is 1.17 times—significantly lower than previous periods.

As of now, Strategy holds 660,624 BTC (more than 3% of the total supply), valued at approximately $60 billion. However, the funding mechanism for this expansion faces structural threats. Bitcoin was traded at $126,000 in October but now hovers between $90,000 and $95,000, breaking the momentum that created demand for the stock.

Approaching the Break-Even Threshold

The risk for Strategy is now not theoretical but entirely mechanical. If the premium (mNAV) drops below 1.0, issuing shares will become dilutive rather than value-creating. The management has acknowledged this risk and announced they will “sell Bitcoin” if the premium drops to parity.

Such a move would create a hopeless cycle: selling assets to lower BTC prices, which would then reduce the valuation of MSTR shares, forcing more sales. To hedge against this, Strategy has raised $1.44 billion in cash to create an “operational runway” until 2026. CEO Phong Le asserts this is necessary to “dispel FUD,” but the math of the model shows the path is narrowing.

BitMine Takes a Different Path

While Strategy adopts a defensive stance, BitMine is shifting toward a different structure: from value storage to yield generation. The company currently holds 3.86 million ETH (about 3.2% of circulating supply), and is accelerating purchases to reach a “5% ownership threshold.”

BitMine’s strategy is based on Ethereum staking—a technology that allows generating income streams from holding assets. The company plans to deploy validators by 2026 to generate over 100,000 ETH in annual yields. Chairman Tom Lee links this to the tokenization trend on Wall Street, estimating total assets accessible could reach “nearly a quadrillion dollars.”

However, yields from validators will not materialize until 2026. Moreover, Ethereum is often less efficient than Bitcoin during market stress periods. BitMine’s approach depends not only on Ethereum’s price strength but also on institutional acceptance of tokenization.

Commoditization Eliminates the Mechanism’s Advantage

A bigger challenge than prices is the emergence of spot ETFs. In 2024, Bitcoin spot ETFs have temporarily added value for companies like DAT (Digital Asset Treasury) because they provide direct access. However, as assets under management declined from a peak of $165 billion to $111.8 billion, then recovered to $122 billion, the market learned a lesson: no need to pay a premium for corporate stocks.

Vanguard—a giant brokerage platform—recently reversed its anti-crypto stance and opened its system to third-party crypto ETFs. This flattens market structure and removes the distribution gap that justified paying extra. The result: no new DATs were established last month, and early signs of treasury disintegration are appearing among smaller companies.

What remains are only the enterprises large enough to survive, but now they must differentiate through superior performance rather than access.

What Will Decide the Future?

The future of Strategy and BitMine depends on three factors. First: the revival of crypto demand in 2026 could re-establish a premium. Second: the premium NAV must stay above 1.0 to avoid a hopeless cycle. Third: capital flows from tokenization and staking must materialize as forecasted.

Until then, their buy-in transactions are not signs of strength but certificates of perseverance in an uncertain environment. Both companies hope for a recovery, but the system’s math only allows a limited window to prove that this despair is not a mistake.