The rise of Bitcoin Treasury Companies, dubbed Suitcoins: strategy, risks and contradictions of the new financial trend.
In recent months there has been a real rush by listed companies to include bitcoin in their balance sheets. The pioneer was Strategy (formerly MicroStrategy), which had already purchased the first $250 million of bitcoin in August 2020. Over time, Strategy has become the world’s largest Bitcoin Treasury Company. Its bitcoin reserves have grown to exceed 600,000 BTC.
Many companies have followed Strategy’s example. Current data from Bitcointreasuries.net indicates that 155 listed companies collectively hold more than 860,000 BTC.
For example, American biotech Semler Scientific has issued convertible bonds (explained later, ed.) and used the proceeds to buy bitcoin, bringing its total reserves to 4,846 BTC. In Japan MetaPlanet has become the reference Bitcoin Treasury Company, almost completely abandoning its own business – the hotel business – and announcing an ambitious acquisition plan of 210,000 BTC by 2027. Other companies have also announced similar strategies: historic video game chain GameStop has updated its investment policy to include BTC as a treasury asset, purchasing 4,710 BTC through a convertible bond offering. Also in the United States, Twenty One Capital, a SPAC launched with support from Tether and SoftBank, has raised $585 million with the goal of accumulating BTC. Even in Europe the phenomenon is spreading: The Blockchain Group, a company listed in Paris, has issued convertible bonds to purchase bitcoin, funds that have allowed it to reach a total of 1,955 BTC.
How the model works
The operational core of the model devised by Strategy is based on using traditional capital markets to finance the bitcoin acquisition strategy. This is achieved primarily through the issuance of various debt instruments, particularly convertible bonds and share offerings. An example is Strategy’s completion, in February 2025, of a $2 billion offering of zero-rate convertible bonds maturing in 2030. Such bonds are unsecured and do not bear regular interest, offering a low-cost financing avenue.
Shares for bitcoin
According to Bitwise, such strategy is characterized by the expectation that Bitcoin’s historical medium-to-long-term returns will exceed the relatively low – or zero – interest rates paid on convertible debt. The overall objective is to ensure that the company’s bitcoins appreciates at a faster rate than the growth of its liabilities, thus creating a positive financial feedback loop that increases shareholder value.
When the price of bitcoin rises, Strategy, which owns significant quantities of bitcoins, sees its accounts improve. This makes the company more attractive to banks and investors, who are therefore willing to lend it money or buy its shares. Indeed, Strategy shares are traded at a higher price than the actual value of the bitcoins the company owns (NAV, Net Asset Value, ed.). For example, Strategy has used ATM (At-The-Market) new share issuance programs to increase the BTC per share index without dilution for shareholders, trading at a 75% premium to NAV as of June 30, 2025.
The company can exploit the price difference to its advantage: when Strategy issues new shares, it sells them at market price. With the money collected it buys bitcoin, but since it sold the shares at a higher price than their theoretical value, it manages to buy more bitcoins than it could based on the real value. Normally, when a company issues new shares, each existing shareholder owns a smaller slice of the pie (dilution, ed.). But in this case the opposite happens: the pie (i.e., total bitcoin) grows faster than the number of shares, so each individual share ends up representing more bitcoin than before. The result is that each shareholder ends up owning more bitcoin per share, even though the total number of shares has increased. Since its creation, Strategy’s BTC per share index has grown about 11 times, with a compound annual growth rate (CAGR) of 63.6%.
However, such system only works as long as investors continue to pay that premium for the shares. If investors lost confidence and the share price fell to the real value of the bitcoins held, the flywheel would stop abruptly.
Through the issuance of bonds and shares to accumulate bitcoin, these companies aim to offer investors amplified exposure to bitcoin, positioning their stock as a proxy. Some investors, especially institutional ones, are attracted to such model because it provides a structured, regulated and liquid way to gain exposure to bitcoin price. According to July 2025 data, over 1,500 institutions hold positions in MSTR for a total value of about $39 billion. Based on 13F filings deposited with the SEC, the largest holders of MSTR shares are:
- Vanguard;
- Capital International;
- BlackRock;
- Morgan Stanley.
Beyond the main holders, the investor landscape also includes pension funds from various American states that have revealed holdings in the company.
Bonds for bitcoin
The convertible bonds issued by Strategy are particularly attractive to institutional investors because they offer indirect exposure to bitcoin price with a controlled risk profile. Some issues have a zero interest rate and do not pay coupons, while others offer a fixed coupon (although low), but all include the option to convert into MSTR shares at a predetermined fixed price, often higher than the market price at the time of issuance. If the share price rises beyond the conversion threshold, investors can transform the bonds into shares with potentially high gains; if the price falls, they still maintain the capital at maturity (losing only the inflation value in the case of zero-rate bonds) and any interest.
For this reason Strategy’s bonds have attracted several institutional investors, including traditional funds and hedge funds such as Allianz, BlackRock, Calamos Partners, State Street and Deutsche Bank.
For example Allianz has acquired almost 25% of a $2.6 billion Strategy convertible bond offering, maturing in 2031. Often insurance companies, like Allianz, are subject to regulatory restrictions that limit the ability to directly purchase digital assets like Bitcoin.
There are two main reasons why institutional investors are attracted to convertible bonds offered by Strategy:
- arbitrage opportunities: many funds implement hedging strategies, buying convertible bonds while short selling MSTR shares to capitalize on volatility and exploit price discrepancies between bonds and shares;
- indirect exposure to bitcoin: since the proceeds from Strategy’s bond issues are predominantly used to purchase bitcoin, these bonds offer indirect and less volatile exposure to the asset compared to direct purchase. Additionally such instruments offer the potential for high returns through the option to convert into MSTR shares, while maintaining the capital security typical of a traditional bond in case of negative performance.
Sustainability and risks
The intrinsic risk for such companies is their dependence on bitcoin price and their share performance. If bitcoin were to suffer a prolonged bear market or a strong price correction, many of these companies could face pressure from growing debts and rapid erosion of investor confidence. In most cases their traditional operating activities, if they persist, become secondary in terms of market valuation.
VanEck and Franklin Templeton emphasize that the system only works provided that the share price remains high. If the stock starts to fall close to NAV, typically below ~0.95×NAV, further share issuances become dilutive and destroy value for shareholders. In practice, when the market is no longer willing to pay a premium, the advantage of such system collapses.
Hosted on Preston Pysh’s YouTube channel, bearish investor Jim Chanos and The Bitcoin Bond Company CEO Pierre Rochard debated the premium on MSTR shares (mNAV) compared to the bitcoins held by the company. Chanos considers the premium excessive and bound to collapse, especially due to the growing proliferation of new companies adopting strategies similar to Strategy. Rochard, on the other hand, justifies the added value through the company’s monopoly on share issuance and its privileged access to leverage instruments.
Last June Semler Scientific saw its share price drop by more than 45% despite bitcoin price having risen: the company’s market value was lower than the value of bitcoins held. Semler’s NAV multiple (mNAV) had fallen below 1x, settling around 0.821x.
In case the stock market devalues these companies too much, they will no longer be able to repay debt or issue new shares without diluting shareholders, risking default.
In May 2022, Strategy’s former CFO and current CEO, Phong Le, declared that the company would face a margin call request if bitcoin price fell to about $21,000. However, the company successfully managed such risk when bitcoin price briefly dropped to $20,800 in June 2022, having sufficient capital.
According to a Standard Chartered Bank report, if bitcoin price fell below $90,000, half of Bitcoin Treasury Companies could find themselves “underwater,” meaning their bitcoin holdings would be worth less than what they paid. This could trigger a series of forced liquidations, creating a negative feedback loop where selling pressure pushes bitcoin price even lower, thus triggering further margin calls throughout the interconnected ecosystem.
The Breed fund report reinforces such concern, suggesting that many of the “Saylor clones” might lack the deep conviction or sufficient financial resilience to withstand significant market downturns, potentially leading them into a “death spiral” if bitcoin price were to fall.
Based on a recent Keyrock analysis, many of these companies will soon face a total “debt maturity” of $12.8 billion by 2028, meaning they will have to return the money borrowed. If bitcoin price were to fall or investors lost confidence, such companies could find themselves in difficulty, having to sell part of their bitcoins or seek new loans under worse conditions. For example Strategy’s position of about $71 billion in bitcoin was built through $7.2 billion of convertible debt raised since 2020. The company’s average purchase price is around $71,300 according to data from the SaylorTracker.com site. However, for Chaitanya Jain, Bitcoin strategy manager at Strategy, the company would still have sufficient collateral to cover all liabilities even in case bitcoin price crashed to $20,000.
Fiat financial engineering on Bitcoin
While being a legitimate use case for a company, the Bitcoin Treasury Company business model recalls traditional fiat finance, applied to an asset conceived to be a decentralized medium of exchange, free of intermediation and independent from central bank policies. The act of issuing new shares or bonds to purchase bitcoin brings back into play the mechanisms of financial leverage, dependence on traditional intermediaries and credit contraction/expansion, reintroducing counterparty risk and the need for trust in third parties.
It is no coincidence that companies adopting such strategy are predominantly companies in financial difficulty or with obsolete business models – companies that, lacking sustainable organic growth, attempt to reinvent themselves through Bitcoin. These are not giants like Amazon or Microsoft that integrate Bitcoin into their diversification strategy, but rather realities often unknown to the general public or on the verge of bankruptcy that see in “Bitcoin transformation” a lifeline to attract investors and justify otherwise unsustainable stock valuations.
A second contradiction emerges in the massive use of financial leverage. Why resort to complex debt instruments that exponentially increase risk to acquire what, since its birth, has resulted almost every year as the best performing asset?
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