Bitcoin Reserve Company: Digital Gold on the Balance Sheet

In the public market of 2025, companies that include Bitcoin on their balance sheets have become one of the focal points for investors. Although there are various ways to gain direct exposure to Bitcoin, such as ETFs, spot, wrapped tokens, or futures contracts, many investors still prefer to indirectly hold Bitcoin by purchasing stocks of Bitcoin reserve companies. The stock prices of these companies are usually higher than their net asset value of held Bitcoin (NAV).

This premium phenomenon reflects the gap between the stock price and the value of the Bitcoin held by the company. For example, if a company holds 100 million USD in Bitcoin and has a total of 10 million shares outstanding, then the Bitcoin NAV per share would be 10 USD. If the stock price at this time is 17.5 USD, the premium rate would be 75%. In this context, mNAV (multiple of net asset value) indicates how many times the stock price is compared to the Bitcoin NAV, while the premium rate is the percentage after subtracting 1 from mNAV.

Many investors may wonder why the valuations of these companies can far exceed the actual Bitcoin assets they hold.

Leverage Effect and Capital Market Advantages

The main reason for the premium on the stock prices of Bitcoin reserve companies may lie in their ability to leverage the public capital markets. These companies can raise funds by issuing bonds and stocks, thereby increasing their Bitcoin holdings. Essentially, they become high-β proxy instruments for Bitcoin, amplifying Bitcoin's sensitivity to market fluctuations.

In this strategy, the most common and effective method is to "issue at market price" ( ATM ) stock issuance plan. This mechanism allows the company to gradually issue new shares based on the current stock price, with minimal market impact. When the stock price is above Bitcoin NAV, the amount of Bitcoin that can be purchased with each dollar raised through the ATM plan will exceed the dilution of Bitcoin holdings per share caused by the issuance. This forms a "per share Bitcoin holding appreciation cycle," continuously expanding Bitcoin exposure.

A well-known technology company is a typical representative of this strategy. Since 2020, the company has raised billions of dollars through the issuance of convertible bonds and secondary equity financing. As of June 30, the company holds 597,325 Bitcoins, accounting for approximately 2.84% of the total circulation.

These types of financing tools are only applicable to publicly listed companies, allowing them to continuously increase their holdings of Bitcoin. This not only amplifies their exposure to Bitcoin but also creates a compound narrative effect. Each successful fundraising and increase in Bitcoin holdings reinforces investors' confidence in this model. Therefore, investors buying stocks of these companies are not only buying Bitcoin but also buying "the ability to continuously increase Bitcoin holdings in the future."

Premium Analysis

The following table compares the premium situation of several Bitcoin reserve companies. A certain technology company is the publicly traded company with the most Bitcoin holdings globally and is a well-known representative in the field. Metaplanet is the most aggressive Bitcoin accumulator, and its transparency advantages will be detailed later. Semler Scientific entered this trend relatively early, starting to purchase Bitcoin last year. Meanwhile, France's The Blockchain Group indicates that this trend is spreading from the United States to the rest of the world.

The NAV premium rates of some Bitcoin reserve companies (as of June 30; assuming a Bitcoin price of $107,000):

| Company Name | Market Cap (Million USD) | Bitcoin Holdings | Premium Rate | |----------|------------------|--------------|--------| | A tech company | 17,445 | 597,325 | 75% | | Metaplanet | 1,048 | 8,465 | 384% | | Semler Scientific | 475 | 2,051 | 110% | | The Blockchain Group | 72 | 110 | 217% |

Although the premium rate of a certain technology company is relatively moderate (about 75%), the premium rates of smaller companies such as The Blockchain Group (217%) and Metaplanet (384%) are significantly higher. These valuations indicate that market pricing reflects not only the growth potential of Bitcoin itself but also a comprehensive consideration of capital market access, speculative space, and narrative value.

Bitcoin Returns: Key Indicators Behind the Premium

One of the key indicators driving the stock premium of these companies is the "Bitcoin yield." This metric measures the growth of the company's Bitcoin holdings per share over a specific period, reflecting its efficiency in increasing Bitcoin holdings using fundraising capabilities without causing excessive equity dilution. Among them, Metaplanet is known for its transparency, with its official website providing a real-time Bitcoin data dashboard that dynamically updates Bitcoin holdings, Bitcoin holdings per share, and Bitcoin yield.

Metaplanet has publicly released proof of reserves, while other companies in the industry have yet to adopt this practice. For example, a certain technology company has not implemented any on-chain verification mechanisms to prove its Bitcoin holdings. At the "Bitcoin 2025" conference in Las Vegas, executives from the company explicitly opposed public proof of reserves, claiming that it would become a "bad idea" due to security risks: "This would undermine the security of issuers, custodians, exchanges, and investors." This viewpoint is contentious, as on-chain proof of reserves only requires the public key or address to be disclosed, rather than private keys or signature data. Since Bitcoin's security model is based on the principle of "public keys being safely shareable", publicly sharing wallet addresses does not jeopardize asset security. On-chain proof of reserves provides investors with a direct means to verify the authenticity of the company's Bitcoin holdings.

Potential Impacts of Price Premium Disappearance

The high valuation of Bitcoin reserve companies still exists in a bull market environment characterized by rising Bitcoin prices and high retail enthusiasm. No Bitcoin reserve company has had a stock price that is long-term below NAV. The premise of this business model is the continuous existence of a premium. As one analyst pointed out: "When the stock price falls to NAV, equity dilution will no longer have strategic significance and will turn into value extraction." This statement directly addresses the core vulnerability of the model, as ATM stock issuance plans (the capital engines of these companies) fundamentally rely on stock price premiums. When the stock price is above the per-share Bitcoin value, equity fundraising can achieve an appreciation of Bitcoin holdings per share; however, when the stock price falls near NAV, equity dilution will weaken rather than enhance shareholders' Bitcoin exposure.

This model relies on a self-reinforcing loop:

1. Stock price premium supports fundraising ability
2. The fundraising is used to increase holdings of Bitcoin.
3. Bitcoin accumulation strengthens the company's narrative
4. Narrative value maintains stock price premium

If the premium disappears, the cycle will be broken: financing costs will rise, Bitcoin accumulation will slow down, and narrative value will weaken. Currently, Bitcoin reserve companies still enjoy advantages in capital market access and investor enthusiasm, but their future development will depend on financial discipline, transparency, and the ability to "increase the per-share Bitcoin holdings" (rather than simply stacking up the total amount of Bitcoin). The "option value" that gives these stocks attractiveness in a bull market may quickly turn into a burden in a bear market.