The Corporate Treasury Bet on Bitcoin: Smart Move or Speculative Theater?

Proof of Steak

The Corporate Treasury Bet on Bitcoin: Smart Move or Speculative Theater?

May 15, 2025

This post is for informational purposes only and should not be construed as investment advice. This post does not constitute an offer or solicitation to buy or sell securities. See full disclaimer at the end of this post.

When Michael Saylor first put Bitcoin on Strategy’s (MSTR) balance sheet in 2020, most of the market wrote it off as a one-off, eccentric decision. Back then, the only public companies that held Bitcoin were crypto natives like miners and service providers. Tesla and Square (now Block) followed suit a few months later (as they say: “one’s a dot, two’s a line, and three’s a trend”).

Fast forward five years, corporate adoption is accelerating at breakneck pace amid a crypto-friendly regulatory backdrop. It feels like every week a new company announces a crypto treasury program. Some are genuine operating businesses with real cash flows and large treasuries (e.g. GameStop), while others are little more than shells hoping to ride the narrative.

Collectively, roughly 100 public companies now hold nearly 790,000 BTC, or almost 4% of the total supply—worth ~$80 billion, offsetting a good chunk of the daily BTC mined output of around 450 BTC per day.

Public company Bitcoin holdings have more than doubled since the November election.

Source: Bitcointreasuries.net

Why Companies Are Doing This

For large, cash-rich institutions, there have always been three options for surplus capital:

Buy back stock.
Pay a dividend.
Reinvest it.

The third bucket has increasingly come to include digital assets. When Saylor pitched Bitcoin to the Microsoft Board, his argument was simple: since its inception, Bitcoin has been the best-performing asset of the last 15+ years. If you’re optimizing long-term value creation, why ignore it?

Some companies are doing this with discipline and clarity. Others, especially on the small-cap and micro-cap end, are chasing meme premiums. These firms often pursue quick go-public routes via SPACs or reverse mergers, then announce BTC and other token buys to generate attention, volume, and inflated valuations. In some cases, Bitcoin holders like Tether are even contributing their own BTC holdings, in exchange for equity, presumably in hopes of cashing in on valuations greater than 1x NAV.

The Good

From the outset, Bitcoin had always been subject to structural supply: after all, miners must sell to cover infrastructure costs. Bitcoin has historically relied on speculative demand and short-term flow, but treasury adoption represents something different: structural demand.

That has profound implications:

Increased legitimacy: Corporate holdings mean higher regulatory requirements and public disclosures, and higher standards of custody and risk management.
Broader institutional participation among equity holders, convertible bond investors, boardrooms, and even passive index holders (Note: Coinbase—one of the earliest public companies with crypto in its treasury, was just added to the S&P 500 this week—a milestone for the space.)
Expands and diversifies the holder base: This can potentially reduce volatility over time and improve price discovery and addresses some of the systemic risk associated with MSTR being a highly concentrated holder.
Geographic expansion: These treasury-backed BTC companies are now emerging across multiple jurisdictions. Take Metaplanet (3350.T) in Japan, which recently adopted a MSTR-like model and quickly attracted global attention. Others are launching in Canada, Australia, Singapore, and the UAE. For investors who can’t (or prefer not to) buy crypto directly, these equities offer a frictionless way of accessing exposure via traditional brokerage accounts.

In short, this trend is one more sign that Bitcoin is steadily moving into the financial mainstream.

The Risks

Of course, none of this is without risk.

Leverage and Bitcoin price remain the key risks. In the small-cap space, we’ve seen companies trade at steep premiums to their underlying BTC per share (referred to as “mNAV” or market cap to NAV)—often far exceeding the ~2x multiple where MSTR typically trades. These valuations can unravel quickly, especially when paired with leverage and limited operational substance. While MSTR’s premium has been relatively stable over time, newer entrants are being bid up to levels that aren’t fundamentally justified, in our view.

Some of these businesses are real, while others are simply wrappers for speculative flows. That creates opportunity given significant room for mispricing. There’s also an element of moral hazard. Remember the Grayscale/GBTC trade? Investors would deposit their Bitcoin in exchange for GBTC shares which traded at a premium as high as 130%. It worked—until it didn’t. Of course, the industry has come a long, long way since those systemically overlevered days, but you can’t help but remember.

Not Just Bitcoin

While BTC is still the flagship, we’re now seeing treasury strategies that include Ethereum, Solana, and—incredibly—meme coins like TRUMP. That last one may sound absurd, but it speaks to how crypto markets and public equity markets are increasingly entangled.

As these trends bleed into equities, the line between “crypto company” and “company with crypto exposure” continues to blur.

What This Means for Factor6 and Our Strategy

At Factor6 Capital, we launched our fund with the belief that crypto and traditional finance would converge. We’re now seeing that thesis play out in real time.

Every time a company adds crypto to its treasury, it becomes investible for us, creating a growing universe of long and short opportunities.

Are they ideal investments? In our view, rarely. We prefer the pristineness of spot Bitcoin without multiples that can go from extreme premiums to even discounts without corporate risk, but a certain few companies deserve their premium and are well-positioned to benefit from rising adoption.

Others are clearly overvalued, riding the wave without substance or strategy. Simply put, they do it because they can.

That divergence is fertile ground for our approach. As this universe grows, we expect even more alpha opportunities, on both sides of the trade. -RA

Disclaimer

This report has been prepared by Factor6 Capital, LP (“Factor6”) for informational purposes only and should not be relied upon as investment, legal, tax, or other advice. The views expressed herein are solely those of Factor6 and do not necessarily reflect the views of any portfolio companies mentioned or other third parties. Factor6 has obtained certain information from third-party sources, including portfolio companies, believed to be reliable. However, Factor6 makes no representations or warranties as to the accuracy or completeness of the information, and such information may be outdated or superseded.

No Investment Recommendation or Solicitation: This report does not constitute an offer to sell or a solicitation of an offer to buy any securities or investment products, nor should it be construed as a recommendation for any investment decision. This report is not an offer to invest in any fund managed by Factor6, and no such offer or solicitation will be made except by means of a confidential private placement memorandum (“PPM”), subscription agreement, and other definitive offering documents, which will only be provided to qualified investors. Any references to securities or portfolio investments are for illustrative purposes only and are not representative of all investments made by Factor6. Past performance is not indicative of future results, and there is no guarantee that future investments will yield similar results. Factor6 does not intend to update any forward-looking statements or projections contained herein, and actual results may differ significantly.

High Degree of Risk: Investments in any Factor6 fund entail a high degree of risk, including the risk of loss of capital. There is no assurance that a fund’s investment objective will be achieved, and investors should not rely on any projections or forecasts. Before making an investment decision, prospective investors should carefully review the fund’s PPM, subscription documents, and related materials, and consult their own legal, tax, and financial advisors.

Suitability of Investment: The investments discussed in this report may not be suitable for all investors, and no representations are made regarding the suitability of any investment for any particular person or entity. Potential investors should evaluate each investment in light of their own objectives, risk tolerance, and financial circumstances.

External Sources & Third-Party Links: Certain information contained in this report may include data obtained from third-party sources or may include links to external websites. Factor6 has not independently verified such information and provides no assurances as to its accuracy or completeness. Links to third-party websites are provided solely for convenience and do not constitute an endorsement of the content on such websites or their operators.

Timeliness & Accuracy of Information: The information contained in this report is as of the date of publication and is subject to change without notice. Factor6 undertakes no obligation to update any information, including opinions, projections, or forward-looking statements contained herein. Market conditions, security prices, and other variables may change and significantly impact the information contained in this report.

Position Disclosure & No Obligation to Update: Factor6 may hold positions in the securities or assets discussed in this report. However, Factor6 is under no obligation to update this report or publicly disclose any changes in those positions. The information contained herein is provided as of the publication date and may change due to market conditions or other factors.

No Reliance on Forward-Looking Statements: This report may contain forward-looking statements, including but not limited to, projections, forecasts, or estimates. These forward-looking statements are inherently uncertain and subject to risks that could cause actual outcomes to differ materially from those expressed or implied. Factor6 disclaims any obligation to update or revise such statements and urges readers not to place undue reliance on them.

Conflicts of Interest: Factor6 has established, maintains, and enforces policies reasonably designed to identify and manage conflicts of interest that may arise from its investment activities. For more important disclosures, including information regarding Factor6’s investment portfolio and potential conflicts of interest, please refer to our disclosures available on our website.

Copyright/Proprietary Rights: This report and its contents are the property of Factor6 and may not be reproduced, distributed, or transmitted in any form without the prior written consent of Factor6. Unauthorized use may result in legal consequences.

Past Performance Disclaimer: Past performance is not indicative of future results, and you should not assume that future investments will be profitable or will match the performance of past investments. Factor6’s portfolio may evolve over time, and this report may not reflect the most recent investments or portfolio updates.