We speak to Eric Benoist & Rita Boutros following their recent research paper, to find out more. 

A major turning point for Bitcoin and other cryptocurrencies came in 2024 when the U.S. Securities and Exchange Commission (SEC) approved a series of spot Bitcoin Exchange-Traded Funds (ETFs). This regulatory endorsement was a significant step to legitimising Bitcoin as an asset class, paving the way for institutional investors to enter the market. Notably, BlackRock’s iShares Bitcoin Trust became the fastest ETF to reach $10 billion in assets under management, achieving this milestone in just seven weeks. This surge in interest has catalyzed a broader acceptance of Bitcoin within traditional finance, prompting companies to reassess their treasury strategies.

There are different possible approaches: in some cases, companies are simply allocating a portion of their capital reserves into Bitcoin, as a way to hedge against inflation, diversify portfolio risk, or strengthen financial resilience. Although the phenomenon is growing, it is still rather marginal in scope. In other cases, companies are straying from their core activities to accumulate substantial amounts of Bitcoin, completely redefining their primary purpose and employing sophisticated financial engineering techniques in an effort to create value for their shareholders.  

MicroStrategy has really led the charge in shaping the movement. Founded in 1989, the company initially focused on software solutions but was facing declining revenues. Under the leadership of CEO Michael Saylor, it pivoted towards Bitcoin in 2020, perceiving it as a superior store of value compared to cash, which Saylor likened to a “melting ice cube” due to inflationary concerns.

Since this strategic shift, MicroStrategy has aggressively acquired Bitcoin, amassing over 582,000 BTC as of June 9th, 2025, with a total value exceeding $62 billion. This move has not only transformed the company’s balance sheet but has also attracted considerable institutional interest, causing its stock price to surge. The firm’s innovative approach to capital markets, including frequent issuances of convertible debt and equity, has enabled it to raise substantial funds for further Bitcoin acquisitions.

MicroStrategy’s success has prompted other companies to consider similar treasury strategies; however, replicating its model does have its challenges. The firm’s ability to raise capital at inflated valuations creates a feedback loop, where investor sentiment drives the premium on its shares, facilitating further Bitcoin purchases. This cycle is critical for maintaining what MicroStrategy calls its “Bitcoin Yield,” which reflects the percentage change in the company’s Bitcoin holdings relative to its shares outstanding.

Nonetheless, the sustainability of this model is contingent on several factors, including Bitcoin’s price trajectory and the company’s ability to manage its financial obligations. As MicroStrategy continues to issue convertible bonds and preferred equity instruments, it faces increasing pressure to deliver consistent returns to investors while navigating the volatile cryptocurrency market.

While it offers compelling opportunities, the Bitcoin treasury model does come with inherent risks. The strategy hinges on Bitcoin’s appreciation; thus, should the cryptocurrency underperform, a company could be faced with significant debt and eroding investor confidence.

The regulatory landscape surrounding cryptocurrencies also remains uncertain. As more companies adopt Bitcoin as a treasury asset, they may face increased scrutiny from regulatory bodies, impacting their operations and financial strategies.

Finally, this situation raises the potential for systemic risk; large holders of Bitcoin could significantly influence market dynamics, and distress signals from major players may trigger panic selling, exacerbating market volatility.

Bitcoin treasuries will likely see further diversification. As more firms recognize the potential benefits of holding Bitcoin, we might see them explore monetization options, such as lending or yield staking, to generate income from their holdings.

Developing a more robust options market for Bitcoin could provide companies with valuable hedging tools to manage price volatility effectively. As the cryptocurrency ecosystem matures, the integration of traditional financial practices with innovative digital asset management will shape the future of corporate treasury management, offering new opportunities and challenges.

The rise of Bitcoin treasury companies signifies a pivotal change in how corporations approach cryptocurrencies. MicroStrategy’s pioneering strategy has not only elevated Bitcoin’s status as a legitimate asset class but has also inspired other firms to explore similar avenues. The sustainability of this trend, however, will depend on the ability of these companies to secure repeat access to finance while navigating the inherent risks and challenges associated with holding digital assets.

As the financial landscape continues to evolve, the interplay between traditional finance and the burgeoning world of cryptocurrencies will shape the future of corporate treasury management, presenting opportunities and challenges for businesses willing to embrace change.