A Heart-to-Heart with Bitcoin and Bitcoin Treasury Company Holders
TechFlow Selected TechFlow Selected
A Heart-to-Heart with Bitcoin and Bitcoin Treasury Company Holders
The dilemma of Bitcoin holders in an era of rampant speculation.
Navigating Web3 tides with focused insightsWritten by: Joakim Book
Translated by: AididiaoJP, Foresight News
As Wall Street kicks off the hype cycle for Bitcoin treasury companies, new "Saylor contenders" emerge every week. How should Bitcoin holders respond? In this late stage of the fiat era, the mNAV (market value to net asset value ratio) game and regulatory arbitrage are either a recipe for disaster or an incredible blueprint for wealth.
Michael Saylor and MicroStrategy have taken the lead, but corporate executives in suits have now entered en masse: there's a mesmerizing magic to corporations holding Bitcoin on their balance sheets, capturing the attention of nearly everyone.
What should a rational, normal, ordinary Bitcoin holder do?
The easiest way to deal with Bitcoin treasury firms and financialized Bitcoin is simply to ignore them entirely. Only time will tell whether these Bitcoin treasury firms and financial instruments succeed—or collapse spectacularly.
But in money, finance (and economics more broadly), there’s usually no neutral choice, no “doing nothing.” My money and savings must go somewhere; my attention and labor must be directed at something. New Bitcoin treasury firms form weekly; aggressive financing or purchasing announcements drop daily. Being in this space makes forming an opinion unavoidable—and having a thoughtful, well-informed view seems almost like a moral obligation.
After years immersed in monetary economics, financial history, and now Bitcoin’s wild financial frontier, I’ve found the path of reason to be quite narrow. On one side lies the promise of rapidly achieving the “hyper-bitcoinization” future we all envision, with corporate structures merely amplifying my Bitcoin holdings along the way. On the other lies a quagmire of financial engineering and speculative frenzy—quickly repackaging Bitcoiners’ fiat contributions as Bitcoin returns.
Why would Bitcoin holders participate in these companies?
Leverage is one reason. As a typical millennial, I don’t own a house, so I can’t easily access cheap debt (which is basically the only reason to own one). I could pledge my Bitcoin via platforms like Firefish (at 6–9% annual interest), or borrow on credit cards (at rates of 11% and 19%). These options aren’t ideal—they’re costly, limited in scale, and far from cheap. Even if Bitcoin grows at a compound annual growth rate (CAGR) of 30–60%, that’s over long cycles, not monthly or yearly, while debt repayments come due monthly or yearly.
In contrast, MicroStrategy (MSTR) and Marathon Digital (MARA) issue convertible bonds at 0% interest. These debts mature years out and amount to hundreds of millions of dollars. As Pierre Rochard said during his debate last month with Jim Chanos:
"The terms Saylor gets... are inaccessible to those of us who just hold Bitcoin in cold storage."
For most Bitcoin holders, joining this game is too tempting—even if it means giving up control and ownership, and paying a hefty premium for shares in these companies.
As a leveraged mechanism, Saylor’s move into preferred stock appears more expensive, paying 8–10% interest—close to what I could borrow myself—but it’s safer. Preferred stock protects the company itself by eliminating margin calls or debt-driven bankruptcy risk, granting unprecedented flexibility. It acts as a pressure release valve: MicroStrategy can choose not to pay dividends on certain preferred shares (e.g., STRD); for STRF, the "cost" of skipping dividends is merely a 1% penalty rate increase going forward. In emergencies, MicroStrategy could even suspend dividend payments on other preferred shares.
Herein lies a paradox: while this is financial leverage for MicroStrategy (it buys more Bitcoin with other people’s money), it’s not leverage for new MSTR shareholders. As Jim Chanos responded to Rochard in that debate: the point of leverage is gaining exposure beyond $1 per dollar invested. If I buy MSTR stock when its mNAV is 1.5, and MicroStrategy itself is leveraged about 20%, then I’m not leveraged at all! (1/1.5 × 1.2 = 0.8). So for every $1 I put into MSTR, I actually get only about 80 cents of Bitcoin exposure. And the company (whose shares I now own) still has to pay costs similar to what I’d pay borrowing—to enjoy the privilege of using other people’s capital.
For most other Bitcoin treasury firms, the math is even worse—primarily due to their inflated mNAV. Investors have become the revenue source that treasury firms chase. When we invest in these companies, we’re playing the fiat game. And how deeply we play correlates directly with the height of the mNAV. I’ve asked repeatedly:
"Why does one Bitcoin, once wrapped in a corporate structure, suddenly trade at two, three, or even ten times its globally most liquid, transparent, and uncontested price?"
Or more bluntly:
"What extreme value transformation happens when you place our 'token' under the wing of financial leverage and promise to issue debt, preferred shares, and equity against it? We seem to hear Satoshi’s ghost whispering: 'Wave after wave of credit bubbles.'"
MicroStrategy’s great discovery—now being wildly imitated—is simple: wrap Bitcoin in a corporate shell, add some leverage, and sell it on Wall Street, doubling the value of the same Bitcoin. Most discussion stops here, with traditional financial journalists busy labeling it a fad or bubble; according to efficient market hypothesis or common sense, nothing should trade above the price of its sole underlying asset.
But let’s go further. Let’s list some reasonable reasons why a company holding only Bitcoin might deserve to trade at a premium to its Bitcoin holdings:
Storage: Self-custody is easier than you think, but many still avoid it. Another odd reason is high-profile global "wrench attacks" targeting Bitcoin holders; paying a small premium for someone else to custody your Bitcoin is justified. No one can wrench my MSTR shares away. Saylor seems to know what he’s doing, so let’s "store" our Bitcoin in his company—premium: 10%.
Future growth: Future Bitcoin is worth more than today’s Bitcoin. At any moment, undisclosed treasury purchases are accumulating value for shareholders but haven’t been announced yet. Every time you buy shares, you see only part of the unannounced trades or acquisitions… but we all know, and can anticipate, that the stock should trade slightly higher than current information suggests. You're always trading on known data while knowing more is happening behind the scenes. That deserves a small premium—say, 5% for MicroStrategy; potentially higher for smaller, more aggressive treasury firms.
Regulatory arbitrage: There’s so much money out there eager to buy Bitcoin but legally barred from doing so. I’m less convinced by this: there aren’t that many individuals or institutions genuinely interested in Bitcoin, and even if they were, premiums created by taxes, licensing, 401(k) rules, or regulatory barriers decay over time and adoption. The same financial incentives and economic forces that give value to Bitcoin treasury firms also erode the initial regulatory moats that gave them value. Premium: 20%. For certain firms, like Japan’s Metaplanet, where Bitcoin investors face high capital gains taxes, this arbitrage premium could be even higher.
Other factors: I may have missed other reasons—like the fact that some of these companies retain real operating businesses—that explain why a bag of Bitcoin in a corporate wrapper should be worth more than the sum of its parts. Let’s add another 20%.
Total: 10 + 5 + 20 + 20 = 55… coincidentally, roughly the level at which MSTR traded when I first crudely calculated these premiums. With Bitcoin priced at $122,500, MicroStrategy’s 628,791 BTC on its balance sheet is worth about $77 billion, yet the company’s market cap is $110 billion (a ~45% premium).
MicroStrategy is a bank: An economic vision
Not a bank that takes Bitcoin deposits and issues Bitcoin-backed loans, but another, deeper kind of economic entity.
You can think of banking as society’s mechanism for risk-sharing. Society lends to high-risk ventures, and the capital markets banking system allocates the risks from these projects. Essentially, it’s the financial version of “who gets what, and why.”
Economically, a bank is a risk-bearing institution with non-public information about the entities it funds. It allocates a small, guaranteed return to lenders, while keeping upside from successful projects—though less than equity owners. If the bank succeeds—on average picking winning projects and earning more interest from good loans than it pays depositors—it generates profit.
This is exactly what MicroStrategy is doing, exploiting an undiscovered zone between the Bitcoin world and the fiat world.
Traditional financial institutions, pension funds, or retirees are the bank funding side of this structure. They “deposit” money into MicroStrategy, with returns and terms determined by the specific tier they choose (STRK, STRD, STRF, STRC, or the residual claim of common stock MSTR).
The bank invests these funds into assets: MicroStrategy sits in the middle, guaranteeing payments to these economic stakeholders by betting that the asset’s performance will exceed the set interest on “bank deposits.” Unlike banks issuing mortgage loans, credit card debt, or small business loans, MicroStrategy has only one borrower: the world’s best-performing asset. MicroStrategy is making a (very smart) bet: that Bitcoin’s dollar value will grow faster than the 8–10% interest it must pay to traditional fiat institutions.
Any middle schooler with a calculator can see that if you borrow at 10% annually to hold an asset appreciating at 40% annually, infinite wealth awaits.
Of course, Bitcoin doesn’t steadily grow 40% every year. If it did, in Michael Saylor’s own words, Warren Buffett would have already bought all the Bitcoin:
"If Bitcoin had no volatility, those richer and more powerful than you would bid above you and take it all—you wouldn’t get any of it… When it becomes perfectly predictable, Warren Buffett will say ‘Oh yes; we get it; we just bought all the Bitcoin’… and your chance is gone."
MicroStrategy only needs to ensure its financing won’t bankrupt it; the issued debt is fully within its control and discretion; dividend payouts are conservative relative to its net capital (i.e., Bitcoin); and above all, debt won’t force the company to sell Bitcoin at unfavorable times.
Fundamentally, Saylor has built a tool perfectly suited to survive extreme downturns. Even if Bitcoin drops 80%—the worst-case scenario, whose recurrence is doubtful given Bitcoin’s size and public profile—even then, the company wouldn’t be crippled. The key to a successful Ponzi scheme is continuous inflow of funds. More precisely, MicroStrategy’s financing is conservatively Ponzi-style (unlike classic fraudulent Ponzi schemes, Saylor isn’t deceiving anyone—the visual overlap exists, but no one is defrauded… at least not involuntarily).
Neither traditional financial journalists nor skeptical Bitcoiners have clearly explained how these schemes could collapse. Economist Josh Hendrickson on "Economic Forces" precisely identified the relevant hurdles:
"If markets are segmented and people expect prices to keep rising quickly, the present value of future liquidation may exceed current liquidation value. If stocks trade at their current liquidation value, they’re undervalued." He also said:
"What MicroStrategy has done is turn itself into a Bitcoin bank by issuing dollar-denominated debt and buying Bitcoin. The company explicitly engages in financial engineering to exploit regulatory arbitrage."
MicroStrategy’s model (especially its imitators, given their respective jurisdictional barriers) could collapse if:
Investors misjudge Bitcoin’s future trajectory; Current restrictions preventing direct Bitcoin purchases (licensing, tax rules, legal barriers) ease; The “flywheel effect” that Twitter users in the Bitcoin world describe—leveraging regulatory arbitrage—depends entirely on “investors maintaining expectations of massive future Bitcoin value appreciation.”
Preferred shareholders and buyers will be unhappy if dividends aren’t paid. MSTR shareholders will be unhappy if they’re diluted solely to satisfy bondholders. But so what? That won’t destroy MicroStrategy.
What would truly destroy this model is the disappearance of these traditional financial barriers to holding Bitcoin. These regulatory frictions are what drive so many firms into existence; make them financial bridges between old and new worlds; allow them to absorb inefficient, low-yield capital globally and inject it into Bitcoin.
If fund managers, treasuries, or family offices start hoarding Bitcoin directly instead of buying MicroStrategy products, the core rationale for Bitcoin treasury firms vanishes.
In short, Bitcoin treasury firms exist because of inertia in the current system. Their sustainability hinges on whether family funds, pension funds, sovereign wealth funds, and traditional investors prefer the hassle of figuring out actual Bitcoin exposure (plus some safe, conservative leverage). If they don’t—and instead happily pay a 50% premium—then yes, the Bitcoin treasury firm business model remains perpetually sustainable.
What else could go wrong?
MicroStrategy does carry custody risk: its Bitcoin is spread across multiple custodians, and the setup is deliberately opaque. What happens to MicroStrategy’s business if Coinbase goes bankrupt? Or worse, if new political winds bring radical tax policies? These are tail risks, but still risks.
If Bitcoin fails, MicroStrategy obviously fails too. If Bitcoin forever stagnates as a $118,000 stablecoin, MicroStrategy’s opportunistic use of abundant financial capital loses almost all meaning—it becomes, as most journalists and analysts claim, just a pile of Bitcoin, and its extraordinary growth (mostly) disappears.
I think this is precisely where many reporters and analysts get confused when viewing this treasury phenomenon: if you can’t see why Bitcoin has value or utility, let alone a role in future money and finance, then a company dedicated to acquiring as much Bitcoin as possible clearly makes no sense.
But if you do see Bitcoin’s utility and future—if its price rises relentlessly against depreciating fiat—then a company using capital markets to acquire more Bitcoin is an entirely different story.
Hedging vs. FOMO: What if I’m wrong?
Rational humility reminds us that perhaps, just perhaps, we’re missing something.
"Diamond hands" are forged over time… and mine are still quite fragile. When Bitcoin’s price plummets sharply, I usually feel deeply uneasy. (I find such sudden extremes troubling, and even in hindsight struggle to explain them.) I act rashly, impulsively throwing rent money or other idle cash—money that shouldn’t go into Bitcoin—into it.
In bull markets, this behavior often benefits me, but one day it will backfire. The more I learn about MicroStrategy, the more I appreciate many of its specially designed products. To me, holding things like STRC (for short-term cash) and STRK (for mild Bitcoin exposure and cash flow) makes some sense. Financially, STRK is like a double remove from holding Bitcoin; short-term price swings are far milder, and it gives me some extra fiat income.
Given that most of my net worth and professional activity are tied to Bitcoin and its price, diversifying a smaller portion of my net worth away from this single domain makes sense.
Why not just park cash in a high-yield savings account?
Two reasons: the yields aren’t high. My “high-yield” USD account pays 4.05%. Saylor’s equivalent product, STRC, targets several hundred basis points higher. STRK (which approximates Bitcoin itself over medium to long term, discounted or amplified based on MicroStrategy’s mNAV) currently yields over 7%. Second, I know myself—I’d likely dump cash from my bank account into Bitcoin during steep price drops; holding STRC or STRK in a brokerage account at least creates a barrier against such irrational moves.
Ubiquitous hedging
Since I’m already structurally short fiat—via the original “speculative attack”—holding debt and Bitcoin, I’m leveraged long, so slight diversification makes sense!
I’ve already maximized contributions to the local mafia (government)-mandated pension scheme. These funds are invested in stocks and bonds (~75:25); their performance is obviously terrible compared to any Bitcoin benchmark, but if, for some unimaginable reason, I’m wrong about the entire narrative of monetary printing and the end of the central banking era, at least I won’t starve in old age.
Second, pension contributions carry massive tax benefits: maximizing them gives me immediate access to ~1.5x the contributed amount. While Bitcoin’s regular 40% annual CAGR will surpass this extra capital in under two years, it also comes with tax-free mortgage benefits; if I ever want to buy a house in the real-world “shitcoins,” I can use this money.
The opportunity cost of Bitcoin is real and compounds severely over time, but it’s not a matter of belief. Real-world practicality dominates: whether hyper-bitcoinization happens in a week or a century makes a huge difference to your lifestyle.
How does all this relate to Bitcoin treasury firms?
Because the “what if I’m wrong?” hedging mindset applies here too.
Despite all the fancy jargon, new metrics, and futuristic moon dreams, I still can’t grasp why one Bitcoin, once wrapped in a corporate structure, should be worth more than Bitcoin itself. Yes, NPV of future growth, yield, capital arbitrage, speculative attack, bets on hyper-bitcoinization banks—but really?
Well, what if I’m wrong? Many people I trust in the Bitcoin space are endorsing these products, more seem to join every minute, and they do have some logic. Cheap leverage, speculative attack, channeling (or “tricking”) fiat capital pools into Bitcoin.
So recently, FOMO led me to invest in two Bitcoin treasury firms: two MicroStrategy products (MSTR and STRK), and the emerging Swedish small-cap H100.
It feels good to hold stocks again
Ten years ago or earlier, I held large amounts of stocks: big, diversified portfolios. For years since, I’ve held none—for obvious reasons.
I chose MicroStrategy’s products because they’re among the least financially insane in this space; I picked the second because I can easily access it through my Nordic bank account, and I didn’t want to bother finding a convenient broker, signing documents, and transferring funds just to play with a few hundred dollars in Bitcoin treasury funds. The world already has enough absurd paperwork.
If these things actually have value, MicroStrategy will be the main player: as their marketing says, MSTR is “amplified Bitcoin.” Since most of my savings are in tokens and my career is deeply rooted in Bitcoin, this diversification makes sense. (Also, MSTR’s mNAV is rapidly approaching 1… it was 1.42 as I write this.)
Emil Sandstedt’s words echo in my ears—I realize I’m the very Bitcoin yield they’re chasing—but with 25% Bitcoin gains and 20% (safe) preferred and convertible debt leverage, around this time next year, my exposure will be balanced again: my ~$150 worth of MSTR shares currently offer ~$120 of Bitcoin exposure; I’m happy to pay an extra $30 to participate in Mr. Saylor’s growing financial empire.
The second is H100. For a small, agile company dominant in a specific jurisdiction, its mNAV of 2.73 is acceptable.
After buying, my first realization: I forgot how fun this could be!
Suddenly, I’m tracking multiple asset prices, not just one. Suddenly, I have a financial stake in real companies doing real things—not just the most portable, global, accessible money. Psychologically, I feel part of a mission: engaging in this speculative attack and building the Bitcoin yield curve—the treasury project. How exciting!
Second realization: Bitcoin has changed the meaning of ownership.
These tools aren’t mine; they’re wrapped in layers of permissioned custodianship. I can click a button to sell them between 9 AM and 5 PM on weekdays, but I only realize value if:
The broker cooperates; The receiving bank cooperates; The government doesn’t block the transaction.
This is worse than Knut Svanholm elegantly pointed out in *Bitcoin: The Antidote to a Clown World*:
"Banks are like a 2-of-3 multisig wallet, with keys held by you, the bank, and the government. In other words, the money in banks isn’t really yours. It isn’t even real money."
Or maybe holding stocks isn’t that great
I quickly reminded myself how opaque, absurd, and bureaucratic stock “ownership” really is. Last month, when I transferred funds to a brokerage account, found STRK, and clicked “buy,” I got an error message: 'This security is not available to you.'
Turns out I wasn’t eligible to buy U.S. securities through that broker.
Traditional financial assets are so opaque and permissioned. Reminder after reminder of these outdated value technologies. Clearly, my “investment” dropped 11% in a day or two, reminding me I still know nothing about fair valuation or market timing. (Though Bitcoin also fell 5% from its two-week $118,000 stable pattern, so opportunity cost was somewhat mitigated.)
When I dove into the lower-tier mud of Bitcoin treasury firms, it got worse: two Swedish penny stocks (H100 and K33—I had to use money originally meant for STRK) dropped 10% and 20% respectively right after I bought them.
Stocks are custodied and intangible, existing in a broker’s database and ultimately in some corporate ledger. They’re not physical… not even truly mine. I can’t spend them, transfer them, back them up, or restore them to a different wallet. They’re stuck in place—using Adam Smith’s famous phrase about money, “dead stock.”
So I impulsively set aside other fiat funds in my regular banking app and bought MARA (where MSTR is available, though none of the other MicroStrategy tools); while MARA, like another treasury firm, issues stock and convertible bonds to accumulate Bitcoin, at least it has an underlying operational business (mining), and its mNAV is around 1, so I’m not paying a premium for their financial market, capital-cost arbitrage games.
How exactly could Bitcoin treasury firms fail?
"We’re very likely to experience a dot-com-like boom and bust cycle in the public stock market."
— Danny Knowles, May 28, "What Bitcoin Did"
MicroStrategy is bulletproof.
As Lyn Alden highlighted during MicroStrategy’s Q2 earnings call, even if Bitcoin drops 80%, MicroStrategy survives unscathed. In the 2022 bear market, the company was in far worse shape, with its Bitcoin directly tied to margin loans and bank debt collateral. In 2025, with preferred shares dominating, that’s not the case.
Beyond occasional obsessions by traditional financial analysts or journalists with mNAV—why a company should trade above its Bitcoin holdings—or shock from Bitcoin circles about using debt to buy Bitcoin—MicroStrategy’s financing is conservatively structured to an astonishing degree. The company holds ~$77 billion in Bitcoin; convertible bonds total ~$5 billion (actually $8 billion, but some are deeply in-the-money, trading more like equity than debt). Preferred shares STRK, STRD, STRF, and STRC total just over $6 billion. (This gives the company ~15% leverage, meaning Bitcoin would need to fall over 85% before solvency issues arise.)
Another failure path: depletion of traditional financial market capital. MicroStrategy’s ability to outperform Bitcoin—via lower/safer capital costs (or better debt terms) or leveraging mNAV above 1 (instant enrichment, as it lets Saylor buy Bitcoin at a discount)—depends on these conditions. If they vanish—no one buys treasury issuances, financial capital flows elsewhere, money printing stops, government security rates spike—then I don’t see how MicroStrategy’s mNAV wouldn’t crash straight back to 1.
Finally, MicroStrategy faces custody risk. As the largest player, holding ~3% of total supply, honeypot risks abound. (For smaller firms spread across very different jurisdictions, this may not be an issue.) MicroStrategy stores its vast Bitcoin holdings with Coinbase; custodial solutions are deliberately opaque.
What happens to MicroStrategy’s business if Coinbase goes bankrupt? Or worse, if new political winds bring confiscation or radical tax policies? These are valid questions, but extremely distant tail risks. Do we really need to worry about them?
Whether Bitcoin treasury firms succeed in bringing Bitcoin to the center of global capital markets—or all of this ends in disaster—remains to be seen.
Conclusion: Selling your soul? Ponzi mania clouding judgment?
Choose your Bitcoin treasury firms carefully: H100 and Sander Andersen appear highly focused on accumulating Bitcoin, and the company is rapidly climbing the Bitcoin treasury rankings. Currently, financial markets reward such efforts. In contrast, the K33 team moves much slower; since their initial Bitcoin launch months ago, their stock experienced a classic short-term pump before gradually returning to baseline. MARA and MicroStrategy prices hover near levels seen months ago.
I may soon grow tired of this latest fiat financial engineering trend. Holding these permissioned, broker-restricted traditional assets offers limited enjoyment.
Keep your Bitcoin in cold storage, not tangled in these Bitcoin securities.
Treasury fever is spreading through Wall Street and excited Bitcoiners. Perhaps Bitcoin’s financialization has arrived—but honestly, I suspect I’ll mostly remain a spectator.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
@BitcoinMagazine
