In a recent interview featured on the Savvy Finance channel, I sat down with macro investor Lyn Alden to unpack a practical question many investors are asking: as crytocurency, bitcoin grows, should you own it directly or consider companies that hold Bitcoin on their balance sheets? This article breaks down the key ideas we discussed, explains the mechanics behind treasury strategies, and gives a framework for evaluating which companies might survive — and which might not.
Table of Contents
- Key takeaways
- Market snapshot: momentum and structural tailwinds
- What exactly is a “treasury company” strategy?
- Valuation and the MNAV puzzle
- Risk framework: what makes a treasury company durable?
- Why would a company choose Bitcoin over buybacks or dividends?
- Investor takeaways: direct ownership vs. treasury exposure
- Final thoughts
Key takeaways
- Bitcoin’s liquidity, regulatory clarity, and tax treatment have improved, making it a more viable treasury asset for corporations.
- Treasury companies can use capital markets and conservative leverage to increase bitcoin per share, which can create a powerful flywheel — but also adds risk.
- Valuing these companies requires new metrics (MNAV, expected BTC per share growth) and a conservative approach to stress testing.
- Direct ownership of crytocurency, bitcoin remains a straightforward option; treasury companies are a complementary, not necessarily superior, exposure for many investors.
Market snapshot: momentum and structural tailwinds
Bitcoin is trading at elevated levels, trading near $120k and approaching its all-time highs. Momentum on many charts points to a continued uptrend, and policy shifts allowing retirement funds greater access to alternative assets have opened new pools of institutional capital. These structural changes matter: an asset that was once too small or opaque for corporations is now liquid, regulated, and tax-friendly enough to be used deliberately on corporate balance sheets.
What exactly is a “treasury company” strategy?
A treasury company (or a company with a Bitcoin-heavy treasury) intentionally holds Bitcoin as part of its reserves. There are two broad flavors:
- Operating businesses that add Bitcoin to their balance sheet while continuing normal operations (cash flows, products, services).
- Pure-play treasury entities that exist primarily to accumulate and manage Bitcoin exposure, sometimes with leverage.
These companies offer investors an indirect way to gain exposure to crytocurency, bitcoin — often through equity or bonds when a direct allocation isn’t possible for certain funds or investors.
Why some investors like this approach
Treasury companies can access capital markets and employ longer-duration debt instruments that individual retail holders generally cannot. That can allow them to increase bitcoin per share over time, creating a compounding effect if the strategy is executed conservatively and sentiment remains supportive.
Valuation and the MNAV puzzle
Traditional valuation methods (discounted cash flow, multiples on operating earnings) don’t map cleanly to companies whose primary appreciation engine is Bitcoin. Analysts have therefore leaned on an MNAV (Market Net Asset Value) framework — a forward-looking estimate of value that factors in expected Bitcoin growth per share.
"The problem with MNAV is it’s recursive: the higher the MNAV, the faster the company can increase Bitcoin per share, and that flywheel works on the way up but can unravel quickly when sentiment changes."
That quote captures the core tension: MNAVs can justify premiums today, but they assume access to favorable financing and steady markets. As companies scale, MNAV premiums generally compress — trees don’t grow to the sky.
Risk framework: what makes a treasury company durable?
Not every company that puts Bitcoin on its balance sheet will thrive. Use this checklist to separate durable operators from higher-risk plays:
- Cash flow profile: Companies with positive or at least neutral profitability are better candidates. Truly zombie firms with no cash flow are hard sells.
- Management expertise: Does the team have real experience managing macro risk, treasury operations, and capital markets access?
- Conservative capital structure: Is debt long-duration and non-callable during bear markets, keeping liquidation risk low?
- Stress testing: Has the company modeled severe bear scenarios for both Bitcoin price and funding markets?
- Jurisdiction/tax arbitrage: Local rules can create wide differences in effective returns and MNAVs.
Why would a company choose Bitcoin over buybacks or dividends?
Historically, companies with excess cash often returned it to shareholders through buybacks or dividends. Bitcoin offers a different option: a store of value with asymmetric upside potential relative to other non-security assets like gold. For companies that want to preserve optionality — say, to survive pandemics, make future acquisitions, or retain executives — holding a portion of reserves in crytocurency, bitcoin can be a strategic choice.
Investor takeaways: direct ownership vs. treasury exposure
If you’re a long-term bullish investor in crytocurency, bitcoin, you have three practical routes:
- Buy and hold Bitcoin directly — the simplest, most transparent exposure.
- Use Bitcoin ETFs or regulated funds if you prefer a familiar financial wrapper.
- Allocate to well-run treasury companies that combine Bitcoin exposure with cash flow and prudent capital structure — but only after rigorous due diligence.
As I said in the interview, I’m bullish on Bitcoin and I hold it directly. I also find treasury companies an interesting part of the equity universe — not as a replacement for direct ownership, but as a complementary option for investors who want a corporate structure, capital-market access, or indirect exposure they otherwise couldn’t get.
Final thoughts
crytocurency, bitcoin is no longer the tiny, illiquid experiment it once was. Companies that adopt it thoughtfully — with conservative leverage, clear stress testing, and competent management — have a plausible path to adding value. But leverage magnifies both upside and downside. Be picky: favor real businesses with sustainable cash flows or pure-play managers with verifiable track records.
Tell me: do you prefer direct bitcoin ownership, ETFs, or treasury companies for your exposure? Drop your thoughts below and keep the conversation going.
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