The listed companies are rapidly changing Bitcoin Treasury vehicles, which raises capital to buy BTC and hold it on their balance sheets. As Bitcoin sees a potential global reserve owner, institutional traction and strong price expectations, this trend may seem good. But there is one problem: most of these companies have acquisition plans without a business plan.
Why buy in a premium when you can buy bitcoin directly?
Almost any investor can buy Bitcoin directly, either in place or through ETFs. So why invest through a listed company trade in a significant premium on the net asset value (NAV) of its bitcoin?
The short answer is: you should not, unless the company has a clear approach for placing its Bbitcoin to work in a way that investors are not easy to replicate. BTC handling should deliver an operational goal. Otherwise, the company should return the capital and let the shareholders buy Bitcoin on their own terms.
Bitcoin Ani ≠ Business Model
To justify premiums, some analysts now use the concept of Bitcoin saidThe percentage of the BTC is increasing per component over time. While this is an interesting KPI to monitor, it does not justify a premium to navigate its own.
Yes, if a company releases equity to a premium above the NAV and buys more BTC, it can increase BTC per part. But if an investor’s goal is to get the maximum exposure of bitcoin per dollar invested, investors should only buy BTC directly.
Long leveraged with limited upside down
To accelerate their acquisitions, many Treasury companies are raising capital through a variety of changeable debt. The result is a leveraged long position in Bitcoin, with full collapse of exposure and limited reversal. This structure is exactly why creditors are eager to underwrite such instruments.
If Bitcoin falls, creditors are paid to the USD, while the company may force to sell BTC handles to cover the debt. If bitcoin is rising, creditors convert their debt to shares to a discount and sell them to get upside down above the conversion price. That is reversed otherwise among the shareholders.
As an investor choosing between buying a leveraged company equity or simply stealing against your own BTC, you need to ask: Reduced reversal is worth avoiding the task of doing it yourself?
If the company is also trading in a huge premium on its underlying bitcoin and no operational plan beyond the purchase and handling of BTC, the answer is unlikely.
The same applies to other simple risk approach to capturing, such as lending to BTC in exchange for interest; They introduced the risk, but few have been working to justify the premium.
A business plan, not just a BTC plan
This does not mean that all Bitcoin treasury companies must trade in or below the NAV. But a premium requires more of a funding and extraction approach, it requires business strategy.
A strong sheet of bitcoin balance can serve as a powerful foundation for an operational business. Financially, balance sheets are the basis for lending, trading, structures and more, and some of Nbitcoin’s current treasury companies are likely to appear as future financial giants.
Brokerage, liquidity provision, collateralized lending and structured products are all examples of operating models that can measure, generate income, and justify premium values.
On the contrary, raising funds to chase “Bitcoin Ani” is not a business plan. If a Pure Play Treasury Company does not have an operational plan, its premium will fall, and it may eventually get it a firm that Ay Learn how to put bitcoin to work.
Bitcoin is the new rate of obstruction. To beat BTC, companies must do more to buy and handle it. They should know how to build a Bitcoin -based business.
