For decades, the company’s treasury has relied on cash, bonds and short-term investments to preserve capital. However, inflation, depreciating fiat currencies and near-zero interest rates have challenged this approach. A new dark horse is emerging, and corporate financing will change forever.
BTC as a company reserve asset
Historically, the company has retained a large amount of cash reserves for stability and liquidity. But, as Michael Saylor, executive chairman of MicroStrategy, thinks, cash is like a melted ice that loses its purchasing power due to currency depreciation. Bitcoin offers an alternative: assets with fixed supply, global liquidity and asymmetric upside potential.
Since 2020, MicroStrategy has actively amassed Bitcoin, turning its corporate balance sheet into a quasi-BTC bank. The company issues convertible debt and equity to fund its purchases, leveraging traditional financial methods to establish the Bitcoin Treasury Department. In 2024 alone, MicroStrategy received 257,000 BTC. The strategy has indirectly turned MicroStrategy into a publicly traded Bitcoin ETF and accumulative machine, thus allowing shareholders to reach BTC through its publicly traded stock $MSTR.
You are reading Encrypted and transparentour weekly newsletters include insights, news and analysis from professional investors. Register here Put it in your inbox every Wednesday.
Two key indicators: Bitcoin per share and BTC earnings
MicroStrategy promotes two key metrics for two companies that study the strategy requires close understanding: Bitcoin per share (BPS) and BTC yield.
Bitcoin Per Share (BPS): The amount of Bitcoin held per share. This indicator allows investors to measure the company’s indirect BTC exposure.
BTC production: The percentage of the number of bitcoin per share changes over time. The KPI attempts to reflect how effective a company has to obtain BTC.
Source: mstracker.com
Company Super Loop
Although many companies maintain traditional treasury strategies, a fundamental shift in corporate financing is emerging. Now, more than 70 publicly traded companies hold Bitcoin on their balance sheets, including Tesla, Coinbase and Block. Even companies outside the technology and finance sectors have adopted this approach, demonstrating its wide applicability across the industry.
This adoption represents not only a trend, but a shift in how a company creates and retains shareholder value. The regulatory environment is evolving, supporting this shift in three key ways:
- SAB21’s Reversal Fundamentally enhances the utility of Bitcoin as a treasury asset. By enabling regulated financial institutions to provide custody services, companies can now use their Bitcoin holdings more effectively through established banking relationships.
- FASB’s Landmark Accounting Changes A more accurate reflection on corporate financial statements is given to Bitcoin economics. Under these rules, companies that accumulating Bitcoin can now recognize the appreciation in their earnings statements, thereby obtaining a clear mechanism for creating value through strategic bitcoin acquisition.
- Proposed Bitcoin Act 2024 The wider regulatory clarity signal is growing, reducing the systemic risk of company adoption.
Now, companies can generate revenue growth through strategic Bitcoin accumulation while building positions in assets with huge appreciation potential. This combination of current income impact and future value potential echoes the classic Warren Buffett’s classic principles that can both produce current returns and reinvest capital at attractive interest rates.
The future shift is not just about adding bitcoin to the balance sheet – it’s about rethinking corporate fiscal management in an era of digital scarcity. Companies that knew about this transition early would have a significant advantage in establishing treasury positions at attractive prices, just like early Internet adopters.
We are entering a new era of corporate finance, where Bitcoin’s unique property is combined with an ever-evolving financial infrastructure to create unprecedented opportunities for value creation and preservation.
Companies that recognize this shift and take action are likely to become Berkshire Hathaways in the digital age.
