It has almost become routine now, when yet another public company announces their adoption of the Bitcoin treasury strategy. Some go further, adding Ethereum or other tokens to their balance sheets. As someone who’s worked in the digital assets space for years, I should be applauding Bitcoin’s expanding footprint in the corporate world as a win. Instead, lately I’ve found myself asking if this approach is rational? Is it sustainable?
That thought hit harder after reading MARA Holding’s Q2 2025 earnings transcript, where CEO Fred Thiel said he’s heard people call bitcoin treasury companies the new ICOs. Different eras, different fundamentals. But the comparison is striking. And worth unpacking.
Before I go further, just a heads-up: unlike my usual analysis built on hard numbers and filings, this is more of a thinking out loud piece. It’s subjective. You might disagree. Frankly, that’s fine. I’d be more worried if no one cares where this is heading.
Bitcoin Treasuries Are Everywhere-But To What End?
Today, over 100 publicly traded companies are reporting holding Bitcoin, Ethereum, or other digital assets. Some have been rewarded handsomely in the market. Others have used the momentum to aggressively raise capital and buy more Bitcoin, often through stock issuances. And not all of them have been subtle about it.
I read X posts writing things like “company X is diluting us to death”, often from investors who watch their value per-share shrinking while the company talks up its growing Bitcoin pile. As long as the stock is rising, nobody seems to mind. But when that stops, or if Bitcoin wobbles, shareholder sentiment tends to change quickly.
The issue isn’t that companies are holding Bitcoin, but whether they’re doing it with discipline and transparency, or just jumping on a trend without a plan.
That’s why Strategy (formerly MicroStrategy) caught my attention in their Q2 2025 earnings release. They’ve introduced something I haven’t seen from others in this space: a clearly defined capital markets framework that ties equity issuance directly to a valuation metric they call mNAV.
mNAV in Plain English
In the context of a Bitcoin treasury, mNAV usually refers to a ratio where the market cap of a company is divided by the fair value of its Bitcoin holdings. It’s a useful metric to tell you how much investors are willing to pay per dollar of Bitcoin the company holds.
If a company has $1 billion in BTC and a $2 billion market cap, its mNAV is 2.0x. That implies a premium assigned over the value of its Bitcoin, reflecting expectations of execution, yield strategies, or broader trust in the company.
This simple mNAV model is how most investors, especially retail, think about the value of a Bitcoin treasury play. And while it's not perfect, it gives a directional sense of sentiment.
Strategy, however, uses a more complex formula:
mNAV = Enterprise Value / Bitcoin NAV
Where:
- Enterprise Value = Market Cap + Notional Debt + Preferred Stock – Cash
- Bitcoin NAV = BTC Holdings × Market Price of BTC
By including debt and preferred stock, Strategy’s version captures the entire capital stack used to acquire BTC - not just equity. It shifts the focus from how much shareholders are paying for Bitcoin exposure, to how efficiently the company is turning capital into Bitcoin holdings. In that sense, Strategy’s mNAV is more of a capital efficiency metric than a valuation premium.
Strategy’s Common Stock ATM Issuance Discipline
In their Q2 2025 earnings press, Strategy published thresholds tied to mNAV tiers, as a guide for initiating ATM programs for Bitcoin purchases:
- Above 4.0x: Actively issue shares to buy more Bitcoin
- Between 2.5x and 4.0x: Issue opportunistically
- Below 2.5x: Avoid equity issuance except to 1) pay interest on debt obligations and 2) fund preferred equity dividends.
This is the first real attempt I’ve seen to bring discipline and structure to what has largely been a freewheeling treasury trend. It discourages reckless dilution when the market isn't assigning a premium. Investors aren’t left guessing. They know when dilution is likely and when restraint kicks in.
This Approach Is Still Not Shareholder-Friendly
Here’s the catch: capital efficiency doesn’t equal equity accretion.
Because Strategy’s EV includes debt and preferred stock, the mNAV ratio might look healthy even when Bitcoin Per Share (BPS) is declining. In other words:
- The company could be efficiently turning total capital into BTC
- But common shareholders might still be seeing lower BTC per share, due to ongoing dilution
So while the company might meet its issuance rule, shareholder value per share still erodes. And that nuance is easy to miss if you're only looking at one KPI.
Bitcoin Treasuries in Different Market Conditions
One thing that often gets overlooked is how sensitive Bitcoin treasury strategies are in different market cycles.
In bull markets, the benefits are obvious. Bitcoin holdings appreciate. Share prices rise on narrative alone. Capital becomes cheap, and companies can issue equity at a premium to acquire more BTC. Everyone wins, on paper.
In a downturn, the same strategy can quickly become a liability. If BTC prices fall or investor appetite for "crypto exposure" fades, companies without operational revenue or a clear path to profitability may find themselves cornered- unable to issue equity, unable to raise debt, and stuck with depreciated crypto assets. Some may be forced to sell Bitcoin, especially if it was bought using debt, just to stay afloat. Treasury strategies that once looked bold begin to feel brittle.
This is why the treasury narrative cannot be the whole business model. Strategy’s experience during the 2022 drawdown is a textbook case: its share price fell over 70% that year alone, and debt covenants became a talking point. The lesson? A treasury strategy that works in one market may break in another. That’s why a disciplined framework is helpful. It creates guardrails, forcing the company to adapt its capital deployment to prevailing market sentiment, rather than pushing forward blindly.
Final Thoughts
The Bitcoin treasury trend has brought digital assets into the corporate spotlight in ways we couldn’t have imagined five years ago. That’s a good thing. But if this is going to stick, if companies truly want to make Bitcoin a reserve asset, we need more than good stories. We need good systems.
Strategy’s mNAV framework isn’t perfect, but it’s a step in the right direction. It recognizes that raising capital to buy Bitcoin is not a neutral act. It has consequences for shareholders, for balance sheets, and for how these companies are perceived over time.
Ideally, a Bitcoin treasury should be the cherry on top of a well-run business, not the whole sundae. A company with a strong core business and thoughtful capital allocation can use Bitcoin to enhance shareholder value. But a company without those foundations is just speculating - only this time, with other people’s money. We’ve seen this story before: dotcoms, ICOs, NFTs. Narrative-driven valuations never last without underlying substance.
For those of us working in this space, what we need is sustainable growth, not another bubble. We need more companies treating Bitcoin as a strategic layer, not a shortcut. And if that means frameworks like mNAV become the norm, I’d call that progress.
Disclaimer: The views expressed in this article are my own and are based on publicly available information. This content is intended for informational purposes only and should not be construed as investment advice. Readers are encouraged to conduct their own research before making any investment decisions. Past performance is not indicative of future results. No recommendation or advice is being provided as to the suitability of any investment for any particular investor.
