There's a billion-dollar Bitcoin fire sale

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Remember the Bitcoin treasury trade? It’s been unwinding.

More than 23,000 Bitcoin — worth over $1.4 billion at the prices they sold into — have been dumped or fully liquidated in 2026 alone, according to Matthew Sigel, head of digital assets at VanEck. 

Indeed, the list is a roll call of retreat. Strategy, led by long-time Bitcoin champion Michael Saylor, has sold around 3,620 Bitcoin. Bitcoin miner MARA offloaded around 15,133 Bitcoin in March, while Bitdeer emptied its entire treasury of 1,741 BTC. One treasury, Prenetics, has banned itself from ever buying again. And the list goes on and on. 

Let’s not panic though. If you look at why they sold, the story flips. Almost none of these were losses of faith. They were actually margin calls in slow motion. MARA sold to repay convertible notes, while Strategy sold to fund dividend payments. Others sold to service debt. 

Except for Prenetics, I doubt that most of these companies lost a shred of conviction for Bitcoin. Instead, their balance sheets decided for them. 

I’d like to examine the trade itself, because it overtook every headline in 2025.

Basically, a Bitcoin treasury is a company that issues shares at $110 to buy $100 worth of Bitcoin. That $10 premium — created because the market values the company above the Bitcoin it holds — is pure profit for already-existing shareholders. Then the company turns around to buy more Bitcoin, issue more shares at a premium, and repeat. 

As long as Bitcoin’s price keeps rising, the flywheel can carry on. But when it reverses — kaput. Equity valuations drop, premiums disappear, and access to easy capital tightens at the exact moment when it’s needed most. 

Treasury companies made three mistakes here: 

First, they overallocated. Bitcoin wasn’t part of their balance sheet, it was the balance sheet. Then, they used leverage to buy more Bitcoin. And finally, they had no rule for the eventual drawdown. 

Sound familiar? It’s the exact playbook that shakes out retail investors every cycle. They buy too much, borrow to buy more, and hold no plan for the eventual 60% drop. When it comes, the position is too big to stomach and too leveraged to hold. So you sell at the bottom.

Many retail investors deal with this in silence. Treasuries are forced to do so publicly with a press release.

So what should you do? Own an amount that you’d never be forced to sell. Forget about leverage, so a drawdown is nothing more than a paper loss. And decide your rules before the volatility kicks in. 

Do that, and a 60% drop is exactly what it’s supposed to be: a sale. 

The treasury trade didn’t fail because Bitcoin fell. It failed because it was built to survive only if Bitcoin never fell.

The best investors don’t learn from their own mistakes. They learn from everyone else’s, and this week, the treasuries handed us a free one.

Own Bitcoin the way the treasuries didn’t.

I'll chat to you next week,

Hector