A Bitcoin treasury is a store of cryptocurrency held by an institution. They are becoming increasingly common among companies. But is this a golden ticket, or could it spell disaster in a volatile sector?
The last year has seen talks of Bitcoin treasuries appear in numerous places as the Bitcoin price USD reached new heights. From listed companies to governments, it seems everyone is opening stores of cryptocurrency as Bitcoin rockets in value. But are people starting to forget its inherent volatility? For these companies, this risk could either be a golden ticket or contribute to a forthcoming price crash.
What is a Bitcoin Treasury?
Many major companies have been attracted to the concept of a Bitcoin treasury due to the actions of MicroStrategy. Formerly a software developer, they have almost totally overhauled their operations, moving from software development to the acquisition of Bitcoin.
In the last year, the Bitcoin price reached record highs of $111,681. At the time of writing, it has moved down slightly to $106,721. Yet sentiment remains optimistic about further bull runs and highs in the near future. The result is that Strategy share prices have also risen in tandem with positive sentiment toward Bitcoin. In September 2024, they were trading at $114.30 and two months later reached $473.83. Today, they are trading at $337.02.
This makes it easy to see how companies want to emulate their success with a treasury. This is when a company converts its cash holdings into Bitcoin. Many now believe it is a strong store of value, better than even gold. As prices rise, so will the holdings of that given organization. It is also assumed that as more companies open stakes in Bitcoin, as do other financial institutions like banks and national reserves, its volatility will decline.
It is not just companies that have begun to do this. The United States Government has recently announced plans to set up a Bitcoin Strategic Reserve, though this will be funded from seized funds. Various states, such as Texas, New Hampshire, and Arizona, have also set up their own.
The Big Three: Meta, Amazon and Microsoft
There are companies opposed to this, and a warning about this business strategy may already have been made by the big three tech companies. In the past few months, Amazon, Meta, and Microsoft have all rejected Bitcoin strategic reserves.
This has often come from shareholders. The 2025 META shareholder meeting saw an overwhelmingly negative response to the idea, with 90% of voters against it. This totalled 5 billion votes in total. The idea was that $72 billion in fiat cash reserves would be changed to cryptocurrency. Meta's board added, “While we are not opining on the merits of cryptocurrency investments compared to other assets, we believe the requested assessment is unnecessary given our existing processes to manage our corporate treasury”.
In most cases, this reluctance is due to the volatility of cryptocurrency. While it has had a sterling year, its peaks and troughs have been bigger than ever. These changes have also been short-term. Bitcoin faced huge, sustained price drops between the end of 2021 ($47.989) and October 2023 ($22,148) before it slowly began to pick up again. It is quite plausible this could happen again, and with companies of this magnitude, playing the long, safer game is paramount.
More Companies Open Bitcoin Treasuries
There are even more companies opening up as Bitcoin treasury firms. This week, US investor Anthony Pompliano announced that he would be setting up one. It aims to hold around $1 billion of Bitcoin on its balance sheet. Known as ProCap BTC, it has raised $750 million in equity and convertible notes. His company will merge with Columbus Circle Capital I to create ProCap Financial. He has announced that the company will use this Bitcoin to make money through lending, derivatives, and other products and services.
Even those who hold Bitcoin have begun to warn against the accumulation of Bitcoin as a corporate treasury. VanEck, the global asset manager, hinted that this could lead to capital erosion. This is when shareholder equity diminishes despite what is on the balance sheet. This is because many issue new stock or take on debt to raise capital.
This has begun to become apparent with companies such as Semler Scientific. Their multiple to net asset value, also known as NAV, recently moved close to a value of 1 at 1.07. This means the company's total value, including market cap and holdings, is only slightly above that of its value in Bitcoin. This means it is no longer able to buy more Bitcoin by selling its shares and stops being able to acquire.
It is unknown how this will play out. For investors, like any investment, buying into these companies depends on your level of risk tolerance. It seems the long-term view, from the bigger companies, is to back away. However, for short-term gains, investing in a Bitcoin treasury company may be the way to go.
