There are now 179 listed companies holding Bitcoin on their balance sheets, all following variations of the same simple formula:
Raise capital on traditional markets, buy Bitcoin and attempt to increase the amount of BTC that backs each share faster than the company dilutes shareholders.
According to Mark Palmer, managing director and senior equity research analyst at StoneX, that’s how treasury companies attempt to “beat” Bitcoin’s returns.
Making that equation work is a lot easier when the price of Bitcoin is going up and investors are happy to fund the next spree of purchases. Unfortunately, the mechanics work in both directions.
When the premium evaporates, investor enthusiasm wanes. Financing gets harder, debt and yield obligations remain, and the same structure that outperformed the asset magnifies the losses on the way down. No surprise that the 50 largest Bitcoin treasury companies bled $83 billion in market value since July 2025.
Metaplanet’s recent shareholder backlash shows the sort of questions that arise when treasury companies dilute their shareholders too much.
Treasury companies are more likely to need to raise money in bear markets, but this creates a potential problem. Palmer says:
“Issuing shares at a premium to net asset value and buying Bitcoin with the proceeds increases the Bitcoin backing every existing share. The same issuance at a discount destroys value.”
So are the outsize returns on offer during the bull market, worth it for the downside risks during the bear?
The math works, until the capital markets stop cooperating
For all the complexity around Bitcoin treasury companies, the basic test for potential investors is relatively simple. Do shareholders end up with more Bitcoin backing each share over time?
Palmer says investors should look past the headline number of Bitcoin a company holds and focus instead on “Bitcoin per fully diluted share, net of debt and preferred stock claims.”
179 Bitcoin treasury companies as of September 2026. Source: SatsIntel
Issuing new shares is not necessarily a problem. What matters, is whether the new capital generates enough additional value and profit that the benefits to existing shareholders outweigh the dilution.
Related: Metaplanet moves 4,800 BTC worth $377M to Coinbase Prime
If the company issues shares for more than the value of the Bitcoin that backs them, and uses that money to buy more Bitcoin, shareholders can end up with more Bitcoin per share. If it raises money below that value, they can end up with less.
That dynamic was very favorable for Strategy during the last Bitcoin bull market, Adam Morgan McCarthy, a researcher at LO:TECH and former head of research at Kaiko, says, because Bitcoin was increasing fast. “They were able to take on new debt. They were able to issue new debt because of that.”
The first blow is half the battle
Choosing the right digital asset treasury is a key decision. With a couple of hundred now on offer, longer established companies have the advantage, explains McCarthy:
“It’s a first-mover advantage, right? Like if you’re Michael Saylor or you’re Bitmine and you’ve got this sort of larger-than-life character at the top, it’s a bit different.”
Strategy’s executive chairman Michael Saylor has become part of the machinery of the trade itself, and McCarthy says he can keep the story moving even when Bitcoin’s price isn’t. Ethereum treasury company Bitmine has a similarly prominent figure in Tom Lee.
Bitcoin and other cryptocurrencies rise and fall on narratives, so having a storyteller out front helps keep investors interested — especially when the underlying asset is in freefall. But McCarthy warns:
“I don’t think there’s enough room for a hundred Michael Saylors; there’s not enough people like that around.”
Related: Strategy raises $334M through stock sales but buys no Bitcoin
McCarthy says many of the companies that followed Strategy were essentially just buying Bitcoin and hoping the stock price would follow. They “didn’t have an exit plan” for when the dynamics reversed, he says, and he expects the shakeout to be even more brutal still:
“I think it’s going to flush out like 95% of it.”
The corporate wrapper comes with baggage
There are also simpler ways to get exposure to Bitcoin by just buying it directly on an exchange, or via a spot Bitcoin exchange-traded fund (ETF).
Spot ETFs let TradFi investors buy Bitcoin through a conventional brokerage account, without having to consider a DAT’s company’s management, financing structure, or governance risks.
Creative financial engineering can be difficult for retail investors to understand, says Palmer:
“The biggest risk that investors face in buying Bitcoin treasury company stocks is forgetting that common shareholders’ claim is a residual one, as convertible debt and perpetual preferred stock sit ahead of them in terms of priority.”
Those instruments, he adds, “carry cash obligations that Bitcoin itself doesn’t generate.”
So, can treasury companies beat Bitcoin?
Matt Cole, chief executive of Strive, one of the largest Bitcoin treasury companies, says investors should just look at the scoreboard:
“Strategy has dramatically outperformed Bitcoin since adopting its strategy. Metaplanet has also outperformed Bitcoin since inception and Strive has outperformed Bitcoin both since announcing our strategy in May 2025 and year-to-date in 2026.”
He adds that, “Strive has not sold a single Bitcoin, and during a Bitcoin bear market we have increased our holdings approximately fourfold while outperforming Bitcoin.”
David Bailey, chief executive of Nakamoto, makes a similar case for Metaplanet, saying it was “the best performing equity in the world for nearly two years” and is “up 1,300% from genesis.”
David Bailey says Metaplanet best performing equity for 2 years. Source: David Bailey.
Despite the returns to date, debt maturity and yield obligations may still cause problems down the line. And some companies without the same access to capital, investor following or balance sheet firepower have found out how quickly the trade can work against them. The two most notable examples are Bailey’s own Nakamoto Inc, whose stock fell 99% from its 2025 peak and the UK company Satsuma Technology, which saw a similar decline.
McCarthy’s own view is telling. When asked how he would deploy $100,000 for Bitcoin exposure, he says he would “mostly buy an ETF” and might put a smaller amount into Strategy “for the vol.”
At the end of the day, buying Bitcoin is a bet on Bitcoin. Buying a treasury company is a bet on Bitcoin plus an additional bet on the people, financing structure, balance sheet and corporate governance wrapped around it.
Magazine: Strategy became a symbol of the dot-com crash: Could history repeat?
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