The recent decline of companies that adopted “digital asset treasury” strategies highlights a basic misunderstanding of how balance sheets and monetary assets function. A scarce asset can protect purchasing power, but it does not remove the need for productive cash flow. When firms borrow against future income that does not exist, they become vulnerable to even small price movements.

Bitcoin was never intended to replace business fundamentals. It offers a predictable monetary base, not a substitute for revenue. Companies that issued debt to purchase volatile assets introduced a structural mismatch. Their liabilities were fixed, while their ability to service those liabilities depended on market appreciation rather than operational output. This is the same pattern seen in speculative bubbles throughout economic history.

The error was not in holding Bitcoin. The error was in assuming that appreciation would cover the absence of a sustainable business model. Hard money principles require discipline. Saving is most effective when liabilities are limited and debt levels are modest. Without these constraints, a balance sheet can become unstable regardless of the asset held.

A decentralised monetary system does not guarantee success for any individual firm. It simply provides a neutral unit of account and store of value. The market will always discount companies that rely on price speculation rather than productive activity. If forced selling becomes widespread, it will be a reflection of excessive leverage, not a failure of the underlying asset.

Bitcoin’s design removes the need for trust in monetary issuance. It does not remove the need for prudent capital allocation. Companies that treat hard money as a speculative instrument instead of a foundation for long-term planning will continue to experience these predictable outcomes.

https://www.perplexity.ai/page/from-2600-gains-to-86-wipeouts-tDCE6F7pRGe1NbNQzLuRLg