The Rise Of Crypto Treasury Companies

Summary

• The $8–9B Galaxy Bitcoin sale (~80,000 BTC, rumored to be Roger Ver) was the largest notional OTC trade ever — and a non-event. Jonah, a former Cumberland OTC trader, walks the bar-napkin math: with ~$60B of daily BTC-delta liquidity and a 10% participation rule, $9B clears in about two days; worst-case variance ~$180M, so you “slap a $250 million charge on it” and go. BTC dipped to 115k and “immediately got bought right back up.”
• The real lesson from the block: fear waves of flow, not one-off trades. Jonah’s actual worry wasn’t the $9B — it was “what if this is the level where all the 2010, 2011 OGs just decide, all right, enough, we’re all out.” The opposite happened: treasury companies slurped it up.
• Crypto treasury companies have raised $90B ($70B MicroStrategy, ~$20B others; MetaPlanet $1.7B, Sharp Bet — likely SharpLink — targeting $5B of ETH), and public markets are “paying $2 in equity value for every $1 in crypto.” A chunk of the bid is pod shops like Millennium and Citadel that can’t buy the ETF, getting new issues at a discount to NAV; separately, insiders are trying to flip aggressively to retail — with three-month lockups versus a year for ICOs. Avi: “in many ways it’s way worse and kind of more gross than the ICO model.”
• Avi’s fragility call: many other treasury-company debts carry covenants that force Bitcoin sales if price drops ~30% — “we’re going to see billions and billions and billions of selling from these companies if Bitcoin goes down too much.” At today’s ~$25–28B ex-MSTR it’s survivable (maybe -10–15% on BTC); at $50–75B it becomes a huge issue. “This is the equivalent of me calling for World War II in 1937.”
• MicroStrategy is the exception, not the template: Avi says that, as far as he understands, it has no strong covenants (“Bitcoin can go down 99.9% and they would have until the maturity date”), and its real business is now inventing Bitcoin structured products like the 9–10% “stretch” savings account. “It would take an implosion to bring down MicroStrategy. It would take a prick to bring down a lot of these other treasury companies” — to which Jonah: “a lot of pricks can cascade into an explosion.”
• Jonah’s market read: the setup is short gamma — “we are either gassing higher or we are nuking lower”, not stabilizing at $118k, and he leans higher. His tell to watch is premium to NAV across treasury companies: “as long as that bid is there, we’re good.”
• On ETH, both concede they missed the turn: ETH/BTC broke a four-year downtrend after two consecutive 30% rallies, driven by treasury vehicles and Wall Street’s catch-up-play logic. Avi thinks ETH “could double from here” and outperforms BTC until the treasury trade unwinds — while insisting the 5–10-year fundamentals are unchanged from when he called it “a piece of shit.” Jonah: ETH is “the XRP of this cycle.”
• Lightning round: alt season “oh yeah, 100%” but needs another Bitcoin leg first; Hyperliquid “probably a buy again” after a month of underperformance; macro bullish on rate cuts (“Powell is going to get steamrolled by Trump”) and AI deflation; only tail risk flagged is Trump’s two-week Ukraine ultimatum to Putin, ~90% nothing.

Deep dive

1. The $9B Galaxy block was bar-napkin math, not a crisis

• Jonah, who ran OTC desks in crypto (Cumberland) and oil, sizes the rumored Roger Ver sale of ~80,000 BTC against the market: tens of billions of BTC-delta trades daily across spot, perps, and CME futures — call it $60B mid-range — and the rule of thumb is a 10% participation rate to avoid moving price. So $9B is roughly “a day and a half… maybe two days” of careful selling.
• The risk pricing is deliberately crude: hold ~$4.5B average over two days, BTC moves 1–2% a day, so $45–90M of daily variance — “let me bake in $250 million worth of slippage to cover the $90 million worth of variance… What do you think, boss?” For blocks this rare, “no systematic process applies” — it’s the head trader, the team, and the CEO ratifying back-of-envelope logic.
• The hedge leaves residue: sell spot, sell perps, sell CME — then “I’m long Roger Ver’s spot… hedged with perps, and then I have to unwind that perp, so probably the whole mess takes a couple of weeks to unwind slowly.”

2. Nobody shops Bitcoin at a discount — they telegraph silently and prehedge

• Avi asks about the Telegram trope — “I’ve got 10,000 Bitcoin at a minus 10% discount, any buyers?” Jonah: “No. Everybody thinks that happens.” For a liquid asset, offering a discount reveals you’re stuffed: “I would think, wow, these guys are so long they don’t know what to do with it. I’m going to go and sell Bitcoin on the basis of that information… I don’t need to talk to Galaxy for that.”
• Discount shopping only works when the asset is rendered illiquid — 16 CryptoPunks hitting a desk, or Galaxy in the FTX bankruptcy offering “one-year locked Solana at a 50% discount.”
• What desks actually do is signal silently: lower offers across everything correlated — ETH, Solana, futures, spot — “you’re the best offer on screen on a bunch of stuff,” without dialing anyone.
• On the market-manipulation accusation, Jonah is blunt about prehedging — shorting ahead of a trade you’ll probably win: “a legal form of front running… If you don’t prehedge, you’re stupid. If you prehedge too much, you’re doing something illegal.” A smart seller puts two or three desks in comp; call only Galaxy “because I like you” and “Galaxy can get away with way more tomfoolery.”

3. Principal in tranches — and the takeaway is don’t panic on blocks

• Jonah puts “very low” probability on Galaxy working the coins agency-style: “why would you hire an OTC desk to do that if you can just… hire an execution trader for $20 an hour?” The desk’s purpose is to take risk “bang, all at once.” Given even Galaxy has cash limits — “there is a number of dollars that Mike Novogratz doesn’t have” — his guess: done principal, in tranches, possibly with delayed fiat settlement. Avi’s one counter-example from his trading days: paying a desk “TWAP plus 25 bips over 48 hours” — but only for esoteric assets on exchanges he couldn’t access.
• The behavioral lesson: “people get way too panicked about one-off big trades and not nearly panicked enough about waves of flow.” Jonah’s real fear was a tsunami — the 2010–2011 OGs all deciding “enough, we’re all out.” Instead the panic dip to 115 “produced a great opportunity.”

4. Treasury companies: $2 of equity per $1 of crypto, sold to pod shops on three-month lockups

• The wall of buyers absorbing that supply: crypto treasury companies, with ~$90B raised in total — ~$70B MicroStrategy, but “$20 billion is not a small amount of capital, Jonah” — MetaPlanet at $1.7B, Sharp Bet (likely SharpLink) going for $5B of ETH. The mechanic: “people on the public markets are paying $2 in equity value for every $1 in crypto that you own” — MicroStrategy proved a mass market exists for non-recourse leverage on Bitcoin.
• Avi’s channel check with the investment banks filling these rounds: a non-trivial share of capital is pod shops — Millennium, Citadel — whose managers can’t buy managed products like the ETF. They buy new issuance at a ~10% discount to NAV; separately, insiders are getting into these deals early and trying to flip aggressively to retail.
• His verdict as a technical insider who stayed out: “it’s way worse and kind of more gross than the ICO model” — zero revenue, debt issued purely to buy crypto, and “three-month lockups on these shares. Three months… If you invested in a fucking ICO, you had a year-long lockup.”

5. The fragility mechanism: covenant-triggered forced selling

• The debt isn’t callable in the bond-desk sense Jonah knows — it has covenants: “if Bitcoin goes down 30%, you have to pay it back.” String that together at scale and “we’re going to see billions and billions and billions of selling from these companies if Bitcoin goes down too much.”
• Avi is careful about the hedge: “We’re not standing on a house of cards… the market is a lot healthier today than it was in 2021” — this isn’t Genesis levering 90% against year-locked tokens. But “if we let these guys get too big without bopping them on the head and saying stop what you’re fucking doing, we might end up in a house-of-cards situation again.”
• The size math: ex-MicroStrategy the vehicles hold ~$25–28B — a forced liquidation today “maybe sends Bitcoin down 10, 15%.” At $50–75B liquidated in a short window it’s a huge issue, and the deeper damage is recapitalization: “if you lose $60 billion, much harder to get recapitalized… it kills the market a lot more.”
• Forced sellers won’t be graceful, Jonah adds — with T+5-ish deadlines “they are going to slam bids… a real amazing P&L opportunity for the OTC desk out there who can just throw terrible bids onto those trades and get hit by panicked forced sellers.”

6. MicroStrategy is a structured-products factory, not a treasury company

• The exception: Avi says MicroStrategy’s debt “is very well structured” and, as far as he understands, has no strong covenants — “Bitcoin can go down 99.9% and they would have until the maturity date to pay back.” The legacy software business is irrelevant; “their revenue stream they invented out of thin air… creating financial products” — like the “stretch” savings account paying 9–10%, funded to buy more Bitcoin. “Man, people want it, Jonah.”
• Avi’s frame: Wall Street builds infinite structured products around every asset; in Bitcoin “the structured-products revolution is being led by MicroStrategy.” Survival math: “It would take a 2021 to nuke these people… a 50 to 70% drawdown for an extended period — which, by the way, MicroStrategy has already gone through. It would take an implosion to bring down MicroStrategy. It would take a prick to bring down a lot of these other treasury companies.” Jonah’s retort, worth keeping: “a lot of pricks can cascade into an explosion.”
• On the retail pitch that treasury cos are “less risky than Bitcoin” because they accumulate coin over time: “it’s not really true, cuz your shares get diluted” — the convertibles issue new equity at strike. “MicroStrategy has pulled that off though.” “Pays to be first.”

7. Short gamma either way — and premium to NAV is the dial to watch

• Jonah’s synthesis: the market is short gamma — higher Bitcoin forces more treasury-company buying, lower Bitcoin compounds the pin pricks into cascading sales. “We’re not going to stabilize at $118,000 a token. We are either gassing higher or we are nuking lower. I tend to think the former.”
• Avi says the risk may materialize if this continues, but is still far away: “this is the equivalent of me calling for World War II in 1937” — directionally right if the trend continues, but “right now we’re pretty far away from it.” He’s making a call on aggregate risk to Bitcoin, not timing the collapse; if premiums flip negative and today’s cohort implodes, “I just don’t care. They’re not that big at this point.”
• Jonah’s preferred metric over absolute size: premium to NAV. $100B of treasury-held BTC at $200k is fine “if the premium to NAV is still enormous — as long as that bid is there, we’re good.” They agree a premium-to-NAV dashboard belongs in the forthcoming 1000x terminal.
• The version Avi actually likes: a PE-firm raise pitched as “Berkshire Hathaway, but instead of holding cash, it held Bitcoin” — real companies with real cash flows allocating the balance sheet to BTC and S&P, “backdooring corporate purchases of Bitcoin” that never materialized after Tesla’s 2021 buy. Jonah’s sympathy: with plumbers quoting $150/hour in LA, “it feels like the dollar is turning into funny money” — S&Ps or Bitcoin feel less risky than dollars “until a redistributionist gets elected.”

8. ETH: the dead cat bounce that wasn’t — “the XRP of this cycle”

• Jonah’s cold water on ETH victory laps: ETH/BTC peaked at 0.09 in December 2021 and fell to ~0.017–0.018 — still down ~80% from the peak. Celebrating the bounce “is literally just revealing that you held ETH all the way down, got absolutely daddied on it.”
• Avi owns his miss: he faded the first 30% candle as a dead cat bounce, “and then ETH proceeded to pull another 30% move higher… I was wrong.” His diagnosis — he fixated on ETH being “still a trash platform” and “overlooked how fucking good the technicals became.” The bid: ETH hit levels versus Bitcoin unseen since 2019, treasury vehicles arrived, and the Ripple-style logic of 22-to-27-year-old finance pros took over — ETH is where brokerage-account money “can go down the risk curve.” As Chris—likely Burniske—tweeted: “bullish price action is the best content marketing.”
• The call: “I do think that ETH could double from here… ETH will probably continue to outperform Bitcoin until the treasury company stuff unwinds” — while long-term, “ETH is still exactly where it was when I said that it was a piece of shit.” Jonah’s label sticks: “it really is the XRP of this cycle… the dino coin that doesn’t go away,” and per Kyle Sani, “the future of ETH is Base” — which Jonah calls “basically the Amazon Web Services of crypto.”
• Jonah sits it out on process grounds: he’s a fundamental trader, technicals aren’t his edge, and “the reason why it’s bad to put on a trade that you can’t get your head around… is that if you start losing money, you have no framework to cling to. You just sell on the lows like a jackass.”

9. Lightning round: alt season yes, Hyperliquid buy, cuts as the catalyst

• Alt season after the ETH rotation? “Oh yeah, 100%” — though Avi wants Bitcoin to “take another leg” first; even “the dogshit ones” could run. Avi says Hyperliquid has underperformed for a month and “is probably a buy again”; Jonah adds, “I never sold any, but I’m going to buy more.”
• Macro: Avi says “for me, it’s just cuts”; Jonah says “Powell is going to get steamrolled by Trump”; Avi adds that AI deflation will boost risk assets across the board. Tariffs “navigated very well.”
• The one exogenous risk on Avi’s radar: Trump’s two-week ultimatum to Putin on Ukraine — “in 90% of cases it means nothing,” but escalation could mean Russian cyberattacks on the US. Jonah’s closer: “every Bitcoin hodler has a plan until a tactical nuke hits likely Zaporizhzhia.”