The strange 1:4 relationship between Bitcoin and companies with BTC strategy

Bitcoin has shown remarkable strength compared to the companies that have adopted it as part of their treasury strategy, but the gap between the digital asset and these companies is becoming increasingly pronounced.

During the last 10 weeks, the shares of Companies with Treasury in Bitcoin (BTCTCs) have fallen drastically, losing between 50% and 80% of their value. This divergence shows an unusual pattern, effectively creating a “1:4 relationship” in cyclical behavior.

12 bear markets in 18 months

The price action of Bitcoin over the last 18 months has been primarily bullish at the macro level, with the leading cryptocurrency setting new all-time highs during this period. This has led many companies to adopt a Bitcoin treasury strategy on their balance sheets.

However, according to data from crypto commentator Mark Moss, the stock prices of companies with a Bitcoin strategy have diverged from Bitcoin itself, losing between 50% and 80% of their market value in the last ten weeks. This divergence shows an unusual cyclical relationship of 1:4, where corporate holders of Bitcoin experience four mini-cycles for every Bitcoin market cycle.

The Japanese firm MetaPlanet is the main case study. In the last 18 months, its stock ($MTPLF) has gone through 12 distinct declines, from sharp one-day drops to prolonged declines over months. On average, these declines wiped out 32.4% of the value and lasted about 20 days. The shortest correction was a brutal drop of 22.2% in one day in April 2024, while the longest and deepest lasted 119 days from July to November 2024, eliminating 78.6%.

Correlation with Bitcoin?

Interestingly, only 41.7% of the declines in MetaPlanet directly coincided with the corrections of Bitcoin. Of the 12 identified mini-bear markets, only 5 occurred synchronized with the declines of BTC. Most ( of 12) were unrelated to Bitcoin and were caused by company-specific factors, such as warrant exercises, fundraising activities, and the compression of the Bitcoin premium at which MetaPlanet is listed compared to its holdings of BTC.

The two most severe drops, however, did coincide with the volatility of Bitcoin. The collapse of -78.6% at the end of 2024 and a drop of -54.4% coincided with periods when Bitcoin itself was experiencing corrections. These overlapping events suggest that, although the volatility of BTC sometimes contributes to the drop, the massive sell-offs of MetaPlanet's shares tend to extend beyond the declines of Bitcoin.

Essentially, instead of the 4-year cycles of BTC, BTCTCs now experience rather 4 cycles in 1 year.

At the time of writing, Bitcoin is in a correction phase and struggling to stay above the support level of $110,000. Popular BTCTC stocks are also dealing with bearish trends along with Bitcoin. Strategy's stock has fallen by 37.1% from its 52-week high, while MetaPlanet has dropped by 58.6%. Others, like The Smarter Web Company PLC (-83.6%) and The Blockchain Group (-70.7%), are recording even greater losses.