Emulating MSTR and other Bitcoin treasury company strategies
March 14, 2025
by a searcher from Harvard University in Sammamish, WA, USA
Has anyone here bought or invested in a private business as a mechanism to acquire Bitcoin or to acquire shares of companies buying Bitcoin? Privately held SMB have different levers than larger public corporations, and I am a bit curious if there’s a playbook. Strategy structures its financing to offer a range of volatility-focused (large vol equities, options, reduced volatility debt, etc.) investment opportunities. What would SMB offer investors by taking Bitcoin and levered Bitcoin risk onto their balance sheet? It’s likely inevitable a private company playbook will be developed.
in Toronto, ON, Canada
Over the years we started accepting other cryptos which we're more receptive to converting to cash when circumstances deem it, but otherwise we just roll it all into BTC.
As a result of that, 100% of our retained earnings are in Bitcoin. No regrets.
We've never taken VC and we now have a tool we can use to fund smaller acquisitions:
Borrow against the BTC, buy a small web hosting company or something similar outright, use the cashflow from the acquisition to paydown the BTC loan (to be clear: we have not yet done this, but we're actively looking for acquisitions where we can do it).
We are not publicly traded (yet) but my alter-ego writes newsletters about the digital assets space and I've been tracking "The Bitcoin Effect" for some time - the play seems to be levering up to acquire BTC, which does make sense if you believe (as I do) that long term, fiat currencies are in a slow-rolling hyper-inflationary event (not a great word for it but it gets my point across).
My recommendation has always been, and continues to be: if you own a business with a diverse customer base, start taking BTC as a payment method, HODL that BTC.
Anecdotally - I was looking at a web hosting company that - like us - had been accepting BTC as payment since 2013, and in much higher volumes. They never kept any of it. They would have been sitting pretty now if they did, even for a fraction of what they collected over the years.
All this is is a variation of the holdco or Warren Buffett playbook - convert the cash into something that gains value over time - only with businesses it's hit or miss (you have to have a working playbook) and gold's CAGR over the past 10 years is something like 8% while Bitcoin's is well north of 25%.
from Colorado State University in Austin, TX, USA
While Bitcoin is volatile. The volatility smooths out over longer periods of time. 60% CAGR over it's lifetime. In addition, Bitcoin is described as digital gold. Bitcoin market cap of $1.6 trillion is roughly 1/10th of Gold market cap. Bitcoiners will argue that Bitcoin can 10x from these levels before it is "fairly valued" to Gold.
Personally, I am a big advocate of having some percentage of your treasury designated in Bitcoin.