The Evolution of bitcoin as a Corporate Treasury Asset

Originally published: July 2025

In recent times, the bitcoin landscape has been significantly shaped by the increasing adoption of corporate treasury strategies involving bitcoin. Although MicroStrategy was the first to embrace this approach in 2020, widespread acceptance took time. However, following a series of market fluctuations and a pivotal update from the Financial Accounting Standards Board (FASB) regarding bitcoin accounting, 2024 and 2025 have seen a surge in companies integrating bitcoin into their treasury assets.

This article delves into this emerging trend and evaluates its implications for the broader bitcoin ecosystem. It also addresses the ongoing debate surrounding bitcoin‘s role as a medium of exchange versus its function as a store of value, a topic often misunderstood in economic discussions.

Why Are Corporations Turning to bitcoin?

In August 2024, when this trend was still in its infancy, I penned an article titled “A New Look at Corporate Treasury Strategy,” which highlighted the advantages of bitcoin as a treasury asset for corporations. At that time, only a few companies had adopted this strategy on a large scale. Fast forward to today, and numerous organizations are now following suit, with early adopters like MicroStrategy and Metaplanet experiencing substantial gains in both price and market capitalization.

While my previous article focused on the rationale for corporations to adopt bitcoin, it’s essential to consider why investors are increasingly interested in this trend. Why not simply invest directly in bitcoin? There are two primary reasons for this shift.

Reason 1: Mandated Capital Allocation

Trillions of dollars are managed under strict investment mandates. For instance, some funds are limited to purchasing only stocks, while others can only invest in bonds. This creates a challenge for portfolio managers who are bullish on bitcoin but cannot directly invest in it through traditional funds. However, if a company issues stock or convertible bonds backed by bitcoin, these managers can then invest in those securities, allowing them to express their positive outlook on bitcoin within the constraints of their mandates. This previously untapped market is now being explored across various countries, including the United States, Japan, the United Kingdom, and South Korea.

As a personal example, I manage a real-money model portfolio for my public newsletter, allowing readers to track my investment positions transparently. In early 2020, I recommended bitcoin as a worthwhile investment and purchased some for myself. When I sought to add bitcoin exposure to my newsletter portfolio, my brokerage did not offer access to bitcoin-related securities at that time. Fortunately, MicroStrategy had added bitcoin to its balance sheet, and since it was listed on the Nasdaq, I could invest in MSTR to reflect my bullish stance on bitcoin. This decision has proven beneficial over the years.

In summary, many funds are restricted to holding stocks or bonds with bitcoin exposure, making bitcoin treasury companies an attractive option for these investors.

Reason 2: Corporations Utilize Optimal Leverage

The fundamental strategy for corporations adopting bitcoin as a treasury asset is to hold bitcoin instead of cash equivalents. Early adopters often exhibit high conviction in this approach, leading them to not only buy bitcoin but also to leverage their positions. Publicly traded companies have access to superior forms of leverage compared to hedge funds, primarily through the issuance of corporate bonds.

While hedge funds typically rely on margin loans, which can lead to forced liquidations during downturns, corporations can issue bonds with longer durations. This allows them to hold onto their bitcoin even during price dips, providing a buffer against volatility. Although bearish scenarios could still force liquidation, they are less likely to occur in the short term. This long-term leverage is generally more advantageous than the daily resets seen in leveraged ETFs, which often suffer from volatility.

In practice, leveraged bitcoin ETFs have not outperformed bitcoin itself since their inception, despite bitcoin‘s overall price increase. This highlights the inefficiencies of daily leveraged products, which can deteriorate in value over time due to market fluctuations.

Thus, bitcoin treasury companies offer a unique investment vehicle for high-conviction bitcoin supporters seeking a safer way to leverage their positions. With a variety of bitcoin treasury companies emerging, investors can choose based on their risk profiles and investment preferences.

Do Corporations Benefit or Detract from bitcoin‘s Mission?

Having established the reasons behind corporate adoption of bitcoin, we must now consider whether this trend is beneficial for the bitcoin network. To assess this, we need to understand the potential pathways for bitcoin to achieve widespread acceptance as a decentralized currency.

Step 1: Defining Success for bitcoin

To envision bitcoin‘s success, we must consider how a new form of money would gain traction. In its early days, bitcoin was primarily mined and traded among enthusiasts. By 2010, Satoshi Nakamoto suggested that bitcoin could acquire value through its unique properties, even if it lacked practical utility.

As bitcoin gained traction, it faced competition from numerous altcoins and stablecoins, which offered similar functionalities. Initially, I hesitated to invest in bitcoin due to concerns about its volatility and the potential for competitors to emerge. However, I later recognized bitcoin‘s growing network effect as a form of portable capital, which significantly enhanced its appeal.

bitcoin can be categorized into two types of money: situational money, which solves specific problems but lacks widespread acceptance, and ubiquitous money, which is widely accepted and held by users. For bitcoin to transition from situational to ubiquitous money, it must be perceived as a reliable store of value, encouraging users to hold it rather than quickly exchange it.

Step 2: The Role of Corporations

In 2014, Pierre Rochard discussed the concept of a speculative attack, where entities borrow weaker currencies to acquire stronger assets like bitcoin. Over the years, as bitcoin‘s market capitalization grew, this practice became more common, with corporations and institutional investors increasingly entering the market.

Critics of corporate involvement in bitcoin often fall into two camps. The first consists of cypherpunks who advocate for self-sovereignty and view corporate custody as contrary to bitcoin‘s ethos. The second group comprises skeptics who argue that bitcoin has been “captured” by large entities. While both perspectives have merit, it is crucial to recognize that bitcoin remains an open and permissionless network, allowing individuals to self-custody their assets.

The presence of corporations can enhance bitcoin‘s stability and liquidity, making it more useful as a peer-to-peer currency. Additionally, corporate adoption may provide political cover, helping to normalize bitcoin in the eyes of regulators.

Risks and Opportunities in the Corporate Era

The question of whether corporate involvement is beneficial for bitcoin is almost moot, as it is an inevitable development. Once bitcoin reached a trillion-dollar market capitalization, it became unrealistic to expect it to remain solely in the hands of individual investors.

Risk: Concentration of Ownership

One potential risk is the concentration of bitcoin ownership among large entities, which could undermine its decentralized nature. However, bitcoin‘s design and economic incentives provide robust safeguards against this risk. The proof-of-work mechanism ensures that holding large amounts of bitcoin does not grant the ability to censor transactions, and the competitive nature of mining helps distribute control across various jurisdictions.

Opportunity: Enhancing Accessibility

The rise of bitcoin treasury companies and spot ETFs presents a significant opportunity to improve how retail investors encounter bitcoin. Historically, many individuals were directed to cryptocurrency exchanges, which often promoted altcoins over bitcoin. Now, with more accessible investment vehicles, retail investors may be more inclined to explore bitcoin directly.

In conclusion, bitcoin‘s journey has evolved from a niche collectible to a widely recognized asset class. As it continues to gain traction among corporations and institutional investors, its potential for broader acceptance and utility as a medium of exchange remains promising. The future of bitcoin lies in its ability to navigate the complexities of corporate involvement while retaining its core values and accessibility for all.

Disclaimer: This article is provided for informational purposes only and does not constitute financial advice. Readers are encouraged to conduct their own research before making any investment decisions.