Nakamoto Lost $224M on Bitcoin in the Worst BTC Treasury Trade

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How Nakamoto Built Its BTC Treasury

Nakamoto Inc. traces its origins to Nakamoto Holdings, a company David Bailey founded in 2025. Bailey also leads BTC Inc., which publishes Bitcoin Magazine. He also oversees UTXO Management, a Bitcoin-focused asset management arm.

The company went public through a merger with healthcare firm KindlyMD. That deal, announced in May 2025, gave Nakamoto a NASDAQ listing and capital market access.

On or around August 19, 2025, Nakamoto acquired 5,744 BTC. The cumulative cost reached roughly $681.25 million. That brought total holdings to 5,765 BTC, including small prior amounts. The average cost basis landed at approximately $118,171 per BTC, near the cycle peak.

Bailey described the vision as “Strategy, squared.” The phrase referenced Michael Saylor’s Strategy (formerly MicroStrategy). Nakamoto’s pitch went beyond passive Bitcoin holding. The company aimed to combine media, asset management, and advisory into one Bitcoin-native conglomerate.

Arkham’s On-Chain Breakdown

Arkham’s tweet stated plainly: “We found the WORST performing BTC treasury company.” The firm’s entity dashboard tracks Nakamoto’s labeled wallets. It shows large inflows matching the August 2025 purchase window.

The dashboard also reveals an outflow of approximately 284 BTC around March 2026. According to bitcointreasuries.net, holdings dropped from 5,765 BTC to 5,058 BTC by March 30, 2026. The sale price was approximately $70,000 per BTC. That locked in a realized loss of roughly $48,000 per coin.

As of March 30, the remaining 5,058 BTC were worth approximately $371.3 million. That implies a BTC price around $73,400. The gap between cost basis and current value accounts for the roughly $224 million in unrealized losses.

Stock Collapse and Q1 2026 Losses

NAKA stock has suffered a near-total wipeout. Shares traded around $5.40 to $5.60 in late May 2026. That is down from nominal peaks above $1,000, adjusted for reverse split considerations. The decline is approximately 99.4%, according to market data.

The company’s Q1 2026 results, filed with the SEC, showed large mark-to-market losses. Under current fair value accounting rules, unrealized crypto losses flow directly into earnings.

The 52-week low for NAKA hit approximately $4.50. Lockup expirations and dilution concerns added further selling pressure beyond the BTC-driven losses.

Nakamoto BTC Treasury vs. Peers

Nakamoto’s performance stands in stark contrast to other Bitcoin treasury companies. Japan’s Metaplanet (ticker 3350) became a top performer. It achieved this through earlier and more disciplined accumulation. Semler Scientific (SMLR) also adopted the model without the same drawdown.

Strategy (formerly MicroStrategy, MSTR) is the original corporate Bitcoin accumulator. It holds over 200,000 BTC with an average cost basis far below Nakamoto’s. The key difference is timing. Strategy started buying in 2020 at much lower prices.

The 2025 wave of corporate BTC adoption brought dozens of new treasury companies to public markets. Many saw compressed mNAV ratios as BTC pulled back from its highs. mNAV measures the gap between market value and net asset value. Nakamoto’s situation is the most extreme because of its concentrated purchase near the cycle top.

The Bull Case for NAKA

Defenders of Nakamoto argue the losses are unrealized. They say the losses become irrelevant if Bitcoin recovers to $118,000 or above. Bailey has signaled confidence through recent insider purchases of NAKA shares.

The company also holds non-treasury assets that Arkham’s analysis does not capture. BTC Inc. and UTXO Management generate revenue independent of BTC price movements. Supporters argue these verticals have real value.

Bailey stated: “Our total focus is on increasing the bitcoin per share.” That framing treats the current drawdown as a temporary paper loss. It positions the strategy as a long-term accumulation play.

Others note that the broader BTC treasury sector experienced mNAV compression. That makes Nakamoto’s decline partly a sector-wide phenomenon, not an isolated failure.

Community Reaction and Social Sentiment

On X, the Arkham post drew sharp reactions. Commenters posted memes about poor timing. Some urged the company to “sell the rest.” The dominant sentiment was negative.

Some defenders pushed back. They pointed to Bailey’s insider buying as a conviction signal. They also argued that dilution and lockup expirations played a larger role than BTC price alone.

Crypto forums on Reddit amplified the criticism of Nakamoto’s execution. The emerging narrative frames the company as a cautionary tale of peak buying. A minority view sees current levels as a potential contrarian entry point.

What Remains Unknown

Several key questions remain unanswered. The precise reason for the March 2026 sale of 284 BTC has not been publicly disclosed. Possible explanations include margin calls, debt covenants, or operational cash needs.

Nakamoto has not issued a formal response to Arkham’s tweet as of May 29. The company’s full debt and covenant status is not entirely clear from public filings. Plans for further BTC accumulation have not been updated.

What Comes Next for Nakamoto

Nakamoto needs BTC to recover above $118,000 to break even on its treasury position. Until then, the company faces continued mark-to-market pressure on its balance sheet.

Whether Nakamoto becomes a cautionary tale or a vindicated long-term bet depends on where Bitcoin goes from here. For now, Arkham’s on-chain data tells a blunt story. The worst-performing Nakamoto BTC treasury company bought $679 million at the top.

This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk.