The seismic shift of listed companies morphing into bitcoin treasury vehicles is creating ripples across the financial landscape. These firms, driven by an insatiable appetite for Bitcoin, are converting capital into the digital asset with an eye towards its potential as a global reserve. Yet, this strategy—seemingly sound on the surface—carries inherent risks that investors should scrutinize.
The Premium Puzzle
The allure of Bitcoin as an institutional asset has prompted many companies to buy and hold it directly on their balance sheets. But here’s the catch: some of these firms are trading at premiums to their net asset value (NAV). Why pay extra when you could snag Bitcoin directly on the market or through ETFs? The question isn’t just rhetorical—it’s foundational. “Investors should only consider these premiums if the company offers something beyond just holding BTC,” says crypto analyst Jamie Reynolds. “Otherwise, you’re better off buying Bitcoin yourself.”
A handful of firms tout “Bitcoin yield” as a metric to justify their premiums—essentially the increase in BTC per share over time. But as Reynolds points out, this doesn’t hold water if the company’s sole focus is buying more Bitcoin without a broader operational strategy. The risk is clear: without an active plan, premiums are precarious. As explored in our recent coverage of Bitcoin treasury companies facing a ‘death spiral’, the lack of a robust strategy can lead to significant challenges.
Leveraged Long and the Debt Dilemma
In their race to amass Bitcoin, some treasury companies have turned to convertible debt, creating a leveraged long position. This strategy is a double-edged sword. If Bitcoin’s price falters, these companies might be forced to offload their holdings to cover debts, leaving creditors holding the reins. Conversely, if Bitcoin surges, those creditors can convert their debt into shares, pocketing the gains. It’s a scenario that leaves shareholders questioning if the reduced upside is worth the convenience.
James Lee, a financial strategist, notes, “Investors have to weigh the risk of diluted gains against the potential of a leveraged position. Without a solid operational backbone, these companies might find themselves on shaky ground.”
Beyond BTC: The Need for a Business Plan
To justify a premium, a company must not only hold Bitcoin but also leverage it for business. Balance sheets loaded with Bitcoin can fuel endeavors like brokerage, liquidity provision, and collateralized lending. These activities not only generate revenue but also cement a company’s position in the market. This is exemplified by Bitcoin Treasury Corp’s recent strategy to boost holdings and plan lending, showcasing a proactive approach to leveraging their BTC reserves.
“Bitcoin is the new hurdle rate,” comments blockchain entrepreneur Sarah Kim. “It’s not enough to buy and hold; companies need to innovate and build a business model around their BTC holdings.”
Without a robust business plan, these firms face the risk of being eclipsed by competitors who know how to capitalize on Bitcoin’s potential. “Some will likely rise as financial powerhouses,” Kim adds, “while others will be gobbled up by those with a clearer vision.”
The Road Ahead
As we navigate through 2025, the landscape is ripe for evolution. The companies that thrive will be those that not only embrace Bitcoin but also integrate it into a comprehensive business strategy. For many, the challenge will be transforming from mere holders of digital gold into dynamic players in the finance sector.
This trend raises questions about the sustainability of current strategies and whether these firms can adapt to a rapidly changing environment. With Bitcoin as a cornerstone, the next few months will be crucial in determining which companies will lead the charge and which will falter. The stakes have never been higher, and the market is watching.
Source
This article is based on: Without Operational Alpha, Bitcoin Treasury Company Premiums Will Collapse
Further Reading
Deepen your understanding with these related articles:
- Public Companies Buy More Bitcoin Than ETFs for Third Consecutive Quarter
- Metaplanet Adds $104M in BTC, Testing Limits of Bitcoin Treasury Plan
- MARA Holdings Nears 50K Bitcoin Treasury Milestone

Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.