Bitcoin treasuries: how companies turned the balance sheet into a crypto bet

Michael Saylor's MicroStrategy (now Strategy) began buying bitcoin onto its balance sheet in 2020 - and spawned an entire genre: public companies whose essence is holding crypto, funding the purchases with share issuance and convertible debt.

Mechanics of the machine

The cycle looks like this: the company's shares trade at a premium to the value of its bitcoins → the company sells shares/convertible bonds → buys more BTC → "bitcoin per share" grows → the narrative feeds the premium. While the premium and the debt appetite are alive, the machine is self-sustaining - effectively a way to buy BTC with leverage through other people's hands and without spot margin calls.

The risk in the construction

The weak link is the premium. If the shares fall to parity or a discount to the assets, issuing new shares stops growing "BTC per share", while debt service remains. The bear scenario: a long BTC drawdown + a wall of debt maturities = forced sales of the very asset everything was built around. Imitators with less scale and worse debt access carry this risk multiplied.

For the market, treasury companies are a structural buyer and an overhang at once: their purchases support the price, their hypothetical liquidations are every bear cycle's horror story. We follow them in the institutions section.