VanEck Warns of Bitcoin Treasury Dilution Risks

1. VanEck flags dilution risk from equity issuance near NAV.
2. Pause ATM share sales under 0.95x NAV.
3. Buybacks and strategic reviews suggested for value protection.

Matthew Sigel from VanEck has raised concerns about the growing risk of capital erosion for Bitcoin treasury companies. The issue stems from firms issuing new shares near or below their Net Asset Value (NAV), which can dilute existing shareholders and devalue the company’s equity. These risks are particularly high in the case of aggressive at-the-market (ATM) equity programs.

Key Safeguards Proposed by VanEck

To protect investor value, Sigel recommends several tactical safeguards:

• Pause ATM programs when shares trade under 0.95× NAV, preventing undervalued issuance.
• Launch share buybacks to counterbalance dilution and maintain share value.
• Conduct strategic reviews of capital allocation policies to ensure long-term alignment with shareholder interests.

These measures aim to maintain confidence in firms holding large Bitcoin reserves while avoiding excessive share dilution.

BTC Treasury Firms Need Smarter Capital Tactics

Bitcoin’s price swings add complexity to treasury management. When firms issue equity near NAV, they risk losing the premium that justifies holding Bitcoin on their balance sheets. By applying VanEck’s strategies, companies can build stronger capital structures, especially during market downturns.

Implementing strict NAV-based issuance policies, along with thoughtful buybacks and capital reviews, can safeguard long-term shareholder value—even in volatile markets.

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