Bitcoin Treasuries Part 2: When Treasury becomes Strategy

In Part 1 of this series, we unpacked the core assumptions driving the Bitcoin treasury trend, from its appeal as a store of value to its promise of diversification and innovation signaling. In Part 2, we zoom in on the strategies of companies placing bigger bets, exploring whether their bold moves offer a blueprint for others or a cautionary tale of belief outpacing reality.

While some firms use Bitcoin as a conservative hedge against inflation or for diversification, a more aggressive strategy has emerged where Bitcoin becomes central to the entire business model, exemplified by Strategy (formerly MicroStrategy). This Bitcoin-centric approach involves using various financial instruments, like debt and equity issuance, to continually accumulate the cryptocurrency, aiming for outsized returns that can significantly exceed traditional operational profits.

We also highlight the inherent risks of these aggressive strategies, including increased leverage, reduced market liquidity, and the potential for severe downturns, especially as more companies adopt similar models.