10X Research: Bitcoin FUD Company Stock Price Crash has Resulted in Retail Investors Losing Approximately $17 Billion

On October 18th, as per Bloomberg, a recent research report indicates that retail investors are estimated to have lost $17 billion during the process of indirectly investing in Bitcoin through digital asset holding companies like Metaplanet and Michael Saylor's Strategy. These losses mainly stem from the excessive equity premium, enabling these companies to issue stocks at prices that are far above the actual value of their crypto asset holdings. Now, the stock prices of these companies have completely crashed, resulting in a large number of retail investors being trapped deeply. "The financial magic era of Bitcoin holding companies is coming to an end," wrote a 10X Research analyst in a report released on Friday from Singapore. This report, titled "After the Magic: How Bitcoin Holding Companies Must Move Beyond the Net Asset Value Illusion," points out that retail investors "have actually lost approximately $17 billion, with new shareholders paying an additional $20 billion premium to gain Bitcoin exposure." Taking Strategy as an example, the author notes that the company's stock price is currently only 1.4 times the value of its Bitcoin holdings, which is a significant decline from the 3-4 times premium levels in the past. Most Bitcoin holding companies' strategy is quite straightforward: issue stocks at a premium over net asset value, use the price difference to purchase Bitcoin, and repeat this process. Researchers pointed out that Metaplanet, through a $1 billion investment in Bitcoin, saw its market capitalization soar to $8 billion at one point and then drop to $3.1 billion, while its Bitcoin holdings were valued at $3.3 billion. "In this process, shareholders lost $4.9 billion in market capitalization, while the company successfully accumulated $2.3 billion worth of Bitcoin - a remarkable 'feat'," the report stated. The report emphasizes the importance of being cautious about the compression between market capitalization and stock price. These companies now need to find a new way to survive. Researchers believe that Bitcoin holding companies must move away from relying on the "inflated" net asset value to purchase Bitcoin and shift towards operating more like arbitrage-driven asset management firms. Although this may reduce Bitcoin's upside potential, the ability to adapt to this new model will determine the profitability prospects of these companies.