What Bitcoin Treasury Companies Actually Do
I think the concept of bitcoin treasury companies is one of those quiet shifts that’s actually pretty significant. These aren’t just companies that happen to own some bitcoin. They’re firms that have made bitcoin the foundation of their balance sheet strategy. It’s a deliberate choice to treat bitcoin as a primary reserve asset, not a speculative side bet.
Perhaps the most interesting part is how this changes their relationship with traditional finance. They’re not just holding bitcoin—they’re building financial products around it. Bitcoin-backed notes, interest-bearing instruments, convertible structures. These companies become access points for capital that can’t touch bitcoin directly.
The Regulatory Workaround That Makes It Possible
Here’s where it gets clever. Many institutional investors—pension funds, retirement accounts, certain hedge funds—have mandates that prevent them from holding bitcoin directly. Their rules say they can only hold equities, bonds, or fund shares. Not bearer assets like bitcoin.
But these same institutions can buy shares in public companies. So when a company like MicroStrategy holds bitcoin on its balance sheet, and investors buy MicroStrategy stock, they’re getting indirect bitcoin exposure through a vehicle they’re allowed to own. It’s a workaround, but a legitimate one.
Steven Lubka called this “regulatory arbitrage” in Bitcoin Magazine. Public companies can raise capital through stock and debt issuance, then deploy that capital into bitcoin. Investors who couldn’t buy bitcoin directly can buy the company’s shares instead. It’s pulling bitcoin exposure into portfolios that would otherwise be prohibited from touching it.
How This Actually Started
The modern bitcoin treasury movement really took off in August 2020. That’s when MicroStrategy allocated $250 million of its reserves to bitcoin. Michael Saylor, their CEO, framed it as a response to fiat debasement and falling real yields.
Other companies followed. Tesla added $1.5 billion in bitcoin to its treasury in early 2021. Square (now Block) made allocations too. These weren’t small bets—they were strategic treasury decisions.
An accounting change in 2023 helped too. The FASB approved new rules allowing companies to report bitcoin holdings at fair market value. Before that, companies had to use an impairment model that made bitcoin look bad on financial statements. That change removed one of the biggest objections CFOs had.
Measuring Success and Understanding Risks
Success for these companies isn’t just about how much bitcoin they own. Investors look at metrics like mNAV—multiple of net asset value. This compares the company’s market capitalization to its bitcoin holdings. A high mNAV suggests the market values not just the bitcoin, but the company’s ability to grow its holdings efficiently.
But there are real risks. Custody is a major one. Companies holding hundreds of millions in bitcoin need enterprise-grade key management. Multisignature setups, geographic key separation, recovery protocols. A mistake here could mean unrecoverable losses.
Regulatory uncertainty persists in many jurisdictions. Tax rules are unclear, securities classifications keep evolving. And there’s reputational risk—corporate media often frames bitcoin adoption as speculative, especially during price drops.
Perhaps the most interesting risk is the institutional pushback. In 2025, MSCI, BlackRock, and Goldman Sachs’ Datonomy index excluded MicroStrategy and Coinbase from digital asset classifications. Despite bitcoin representing most of their balance sheet exposure. Some see this as legacy finance protecting itself from a competing monetary system.
The Alternative Risk
But there’s another risk to consider—the risk of not holding bitcoin at all. The U.S. M2 money supply has grown by more than 7 percent annually since 1971. A company holding idle dollars loses about 7 percent of purchasing power each year.
U.S. Treasuries typically yield 1 to 3 percent. Compared to 7 percent monetary expansion, that’s a real loss of 4 to 6 percent annually. Stock buybacks might boost earnings per share but don’t preserve long-term monetary value.
Bitcoin offers something different. Fixed supply of 21 million. No issuer. No credit risk. Michael Saylor projects 29 percent annual returns over the next 20 years. Even if that’s optimistic, a modest bitcoin allocation could offset fiat debasement.
Some analysis suggests as little as 2 percent in bitcoin might be enough to break even in real terms. With regular rebalancing, 5 to 30 percent could preserve or grow purchasing power while maintaining fiat liquidity.
These companies are building something that might matter more as traditional finance becomes less stable. They’re not just storing reserves—they’re restructuring balance sheets around monetary certainty.
