Original Title: The $Strategy Strategy Proliferation

Original Author: Nick D. Garcia, Breed Investment Partner

Original Translation: BitpushNews

Key Points

The next stage of Bitcoin development has arrived: companies adopting Bitcoin on their balance sheets. As of May 2025, a total of 199 entities collectively hold 3.01 million BTC (approximately $315 billion), and this number is still rapidly growing.

Companies whose primary purpose is to hold Bitcoin will be considered Bitcoin Holding Companies, with their valuation methodology similar to the largest Bitcoin company Strategy. To survive, these companies must pay attention to a key premium metric called "Multiple on Net Asset Value" (MNAV) — this is the most critical measurement.

The MNAV premium depends on the market's trust in the core team and their execution capabilities. These teams must execute Strategy's strategy: increasing the per-Bitcoin holdings through debt financing, equity issuance, and cash flow reinvestment. Currently, newcomers are expanding this approach.

The biggest threat is a prolonged bear market that weakens the MNAV premium, especially at the time of debt maturity. Newly formed Bitcoin treasury companies face greater risks as they operate under stricter capital raise conditions and higher leverage. Once failures start to emerge in the industry, the strongest players may acquire struggling companies and consolidate them. Fortunately, as most financing is equity-based, the contagion risk is limited; however, companies heavily reliant on debt pose a greater systemic threat.

A New Phase: Corporate Rush to Adopt Bitcoin

We have witnessed Bitcoin's rise in recent years. Not only has its price surged, but its adoption and recognition have also crossed significant milestones. Key milestones include:

· In September 2021, El Salvador recognized Bitcoin as legal tender;

· In January 2024, BlackRock launched the IBIT ETF;

· The U.S. President designated Bitcoin as a strategic economic focus;

· And in the summer of 2025, the adoption of Bitcoin on corporate balance sheets surged.

According to Bitcointreasuries.net data, currently 199 entities collectively hold 3.01 million BTC ($315 billion). Among them, 147 private and publicly traded companies hold 1.1 million BTC ($115 billion). Recently, a wave of companies announced new Bitcoin treasury strategies. These companies include entities with diversified balance sheets and those specifically focused on Bitcoin treasury, spanning different countries and industries, led by trusted teams.

Since the beginning of 2024, the amount of Bitcoin held by companies has more than doubled. Strategy Company holds over 580,000 BTC, representing 53% of the total corporate holdings. Other companies holding over 10,000 BTC include:

· Block.one (164,000 BTC)

· Tether (100,500 BTC)

· MARAHoldings (49,140 BTC)

· Twenty One (31,500 BTC)

· RiotPlatforms (19,200 BTC)

· Galaxy Digital (12,800 BTC)

· CleanSpark (12,100 BTC)

· Tesla (11,500 BTC)

· Hut 8 (10,300 BTC)

Given its scale, reputation, and countercyclicality, Strategy is essentially destined to remain a leader among Bitcoin-holding companies. However, what is more noteworthy is that Strategy's model is being replicated. More and more companies are incorporating Bitcoin into their balance sheets, and new companies solely dedicated to Bitcoin treasury are emerging, signifying a profound shift in Bitcoin's significance.

Operation Mechanism and Valuation Method

For companies that add Bitcoin to their balance sheet while maintaining their core businesses, their valuation still relies on their primary operations. However, once a company's sole purpose is to hold Bitcoin, its valuation is primarily based on the Bitcoin held. To attract investors to buy their stocks instead of holding Bitcoin directly, these companies must achieve returns exceeding Bitcoin's performance. This excess return is known as the "Multiple of Net Asset Value" (MNAV). For instance, Strategy holds 580,250 BTC valued at around $60 billion, while its market capitalization is $104 billion, resulting in an MNAV of 1.7x. The fluctuation of MNAV depends on various factors such as company size, market experience, and other activities. However, maintaining a 2x MNAV as Strategy has historically achieved is considered the long-term gold standard.

The market will not attribute an MNAV premium solely because a company holds Bitcoin, unless investors believe that the company's management team can consistently and stably grow the "per-share Bitcoin" quantity.

Since 2020, Strategy has been proving its capabilities through three capital leverage methods:

· Convertible Bonds: Issuing low-interest convertible bonds that only convert to equity when the share price rises 30–50% above the issuance price, allowing for large-scale financing at a lower cost without easily diluting equity.

· At-The-Market (ATM) Stock Issuance: Continuously issuing new shares through an ATM program when the stock price is above the MNAV, effectively dollar-cost averaging Bitcoin purchases.

· Operational Cash Flow Reinvestment: Using all free cash flow generated by traditional operations to purchase spot Bitcoin.

Latecomer companies are also adopting and innovating this strategy. Some innovative approaches include:

· Allowing Bitcoin holders to convert to shares through swaps to avoid triggering capital gains taxes;

· Acquiring companies below net cash value and converting their value into Bitcoin;

· Acquiring distressed Bitcoin-related litigation claims;

· Leveraging media and events to increase influence;

· Financing through PIPEs (Private Investment in Public Equity); utilizing regulatory arbitrage.

Who are the participants?

As of the first half of 2025, over 40 companies have publicly announced their intention to adopt Bitcoin on their balance sheets, collectively raising billions of dollars to execute these strategies, with variations in industry, geography, execution mode, and listing path.

Noteworthy mentions include:

· Metaplanet (Japan): Among the early international participants, leveraging Japan's ultra-low interest rate environment;

· Semler Scientific and GameStop (USA): Their Bitcoin treasury strategies have garnered mainstream media attention;

· Twenty One Capital: A specialized firm backed by Tether and Cantor;

· Strive and Nakamoto: Rapidly listing through reverse mergers.

Please refer to the chart above to learn about more companies that have announced their Bitcoin treasury strategies as of May 2025.

Is the Model Sustainable?

No strategy in the financial sector is foolproof — and Bitcoin treasury companies are no exception.

Strategy underwent a significant test during the bear market of 2022–23: Bitcoin plummeted by 80%, MNAV premium vanished, and new sources of capital dried up. Nevertheless, the company survived, albeit Saylor may have had some sleepless nights. The biggest survival risk is an extended bear market where the MNAV premium erodes, and debts come due. If the stock price falls to or below net asset value, and lenders refuse to refinance, the company may be forced to sell Bitcoin to repay debt — triggering a vicious cycle of price declines and sell-offs.

Newly established treasury companies face higher risks. Without the scale, reputation, and passive index fund flows of Strategy, their financing terms are worse, and leverage is higher. In a bear market, these structures may quickly trigger margin calls and forced Bitcoin liquidation, further exacerbating the market downturn.

Next Steps

The expansion of Bitcoin treasury companies is still in its early stages; however, this model has begun to extend to other crypto assets — for example: Solana: DeFi Development Corp (with a market cap of $100 million, holding over 420,000 SOL), Upexi, and Sol Strategies; Ethereum: SharpLink Gaming, raising $425 million in a financing round led by Consensys.

It is expected that more companies globally will adopt this model, covering more assets, and using higher leverage to pursue success. Most companies will fail. Fortunately, as most financing is equity-based, the contagion risk is low. However, companies heavily reliant on debt pose a systemic threat.

In the end, only a few companies can sustain the MNAV premium long term, relying on strong leadership, strict execution, savvy market operations, and a unique strategy — enabling them to continuously drive the growth of Bitcoin's per-share value regardless of market fluctuations.

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