Upbeat music plays throughout.
Animation: An article titled MicroStrategy Buys Record $4.6 Billion of Bitcoin is displayed. Then it's replaced by a chart titled "Strategy (MSTR) stock performance," which shows the change in the stock price from January 2024 to January 2025. The chart starts at 0% and rises to about 200% around April. In October the stock price broke above 200% and rose to 650% before falling below 400%.
On-screen text: Disclosure: Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.
Narrator: The stock price of software company MicroStrategy soared when it announced it bought $4.6 billion in bitcoin in fall 2024. The company, which changed its name to Strategy (MSTR), saw its stock price performance of 2024 reach above 650% at its November peak. Strategy experienced about a $2 increase for every dollar of bitcoin it purchased.
On-screen text: Scott Thompson. Senior Manager, Trading & Derivative Coaching.
Narrator: Investors seem to want exposure to bitcoin so badly that in some circumstances, they were willing to double their costs.
On-screen text: An article titled "GameStop buys bitcoin worth $513 million in crypto push" is displayed. A new article appears titled "Trump Media Raises $2.44 Billion for Bitcoin Treasury Plan." The line "The company's shares rose as much as 7.6%" is highlighted in the article.
Narrator: An increasing number of companies, from GameStop to Trump Media, are finding that they can boost their share prices by buying cryptocurrencies for their corporate treasuries.
Animation: A pie chart titled "Entities Holding BTC" is displayed. It's separated into Public Companies, Private Companies, Governments, ETFs/Other Funds, DeFi/Smart Contracts, and Exchanges/Custodians.
Narrator: In May of 2025, BitcoinTreasuries.net reported that 118 companies had allocated at least some of their business to holding crypto. What some critics find troubling with this strategy is that many of these companies started off with an entirely different business objective. Putting large chunks of cash in a historically volatile asset that isn't tied to their core business has raised a red flag or two.
Let's talk about why investors are willing to pay up to twice as much for exposure to bitcoin through stocks, why companies are adding crypto to their treasuries, and a few risks and other things for investors to consider.
Many investors like companies that put crypto in their treasuries because it provides flexible access to the crypto markets compared to other crypto-related assets like ETFs. The capital structures of crypto treasuries are more flexible, so they can raise more money by issuing shares, selling bonds, or borrowing from other financial institutions. The ability to borrow to buy crypto creates a levered strategy that could result in higher returns. However, levered strategies also run the risk of higher losses if the cryptocurrency declines in value.
Animation: A chart titled "MSTR vs. bitcoin performance" compares the stock price of MSTR to price of bitcoin from June 2024 to June 2025. The two lines were nearly in sync from June to September, but then MSTR saw returns reaching above 180% while bitcoin reached about 70% in November. The gap between the two lines narrowed by March with a difference in returns around 10%. By May, the gap had widened to 100%.
On-screen text: Disclosure: Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.
Narrator: While it's true that companies like Strategy saw their stock prices greatly outpace bitcoin and bitcoin futures, the gap between them has varied over time.
However, crypto treasury stocks can reduce investing costs because stock commissions tend to be less than other crypto vehicles. For example, someone directly buying or selling a cryptocurrency like bitcoin on a crypto trading platform can pay anywhere from 50 to 250 basis points more. An investor holding a spot bitcoin ETF pays 25 basis points or more per year. On the other hand, many listed stocks trade commission free at Schwab when traded online and a single company stock typically doesn't have an annual expense ratio.
While many investors see these companies as another way to gain exposure to bitcoin, doing it through a company that has no business ties to the asset may be cause for pause. Why would a software or health care company suddenly shift to focus on acquiring and storing crypto? Some have argued that crypto may be an inflation hedge, while others caution that there's not a good enough track record.
Crypto treasuries can be broadly separated into one of two models. The first is a company that is pivoting way from their current business to focus on what they see as a new opportunity as a buy-and-hold crypto treasury company.
Animation: A chart titled "U.S. Consumer Price Index (CPI) YoY change" shows the rate of change in the index from January of 2020 to June of 2025. The index starts at 2.5% and rises above 8% by mid-2022 before falling to 2.5% by 2024 and staying in that area.
On-screen text: Disclosure: For illustrative purposes only.
Narrator: The second model is businesses that adopt a crypto cash strategy along their existing business line to hedge against inflation. Rising inflation over the previous few years has increased concerns about the falling purchasing power of their cash. These companies adopting crypto strategies may see cryptocurrencies like bitcoin as a way to combat that loss.
While many cryptocurrencies have failed to put up sizeable returns, bitcoin had a 10-year average annualized return of nearly 50% through 2023. While past results aren't indicative of future returns, some companies feel that there's still opportunity for bitcoin to outperform other business avenues.
However, a record of outperformance doesn't necessarily mean it's definitively an inflation hedge.
Animation: An article titled "Understanding Bitcoin Treasury Companies" is displayed.
Narrator: Nathan Peterson, director of derivatives analysis with the Schwab Center for Financial Research, warns that there's no long-term track record of crypto being a true inflation hedge.
Animation: A chart titled "Bitcoin vs. U.S. CPI" compares the price of bitcoin to the U.S. Consumer Price Index (CPI) year-over-year precent change from 2021 to 2024. Bitcoin's price rose from $35,000 to more than $60,000, then fell below $35,000 and then rallied $70,000 in 2021 while the growth rate of the CPI rose from 1% to 7%. Bitcoin fell to $12,000 by the end of 2022 but the CPI rose to nearly 9% by the middle of 2022 and then slowed to 6%. Bitcoin rallied to $44,000 by the end of 2024, but the CPI fell to a rate near 3%.
On-screen text: Disclosure: Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.
Narrator: Throughout much of 2021 and 2022, bitcoin experienced both sharp rallies and sharp declines even though inflation data consistently ticked higher. And then bitcoin gained significantly as inflation rates started to decline in 2023.
Another reason companies are storing cryptocurrencies is to diversify their cash holdings. Many international companies commonly hold reserves in foreign currencies like the euro or the yen if they do business in Europe or Japan. Likewise, companies can conduct business in bitcoin or ether, the cryptocurrency of the Ethereum blockchain. Doing this allows buyers and sellers to connect directly and avoid going through centralized banks.
Beyond anything else, a primary reason that companies are adding crypto is because there's so much demand for exposure to it. People are willing to pay a premium for a crypto treasury stock, so many companies are seizing the opportunity.
Before investing in crypto treasury companies, there's some important things to consider, like what exactly management plans to do with its core business and its crypto business.
The primary risk to crypto treasuries is the performance of the underlying asset, which tends to be quite volatile. A steep decline in the value of that asset could result in an equally steep decline in the value of the business.
Secondly, companies borrowing to buy crypto have an additional risk because falling crypto prices could result in losses compounded by borrowing costs and the depreciating value of the leveraged assets. Companies may be forced to meet a capital call requiring them to come up with more cash or sell some, if not all, of their position.
Third, the treasury company could go out of business even if the underlying crypto is still valuable. Building on the previous risk, a company using a levered strategy may need to liquidate its holdings to cover a capital call if the underlying crypto suffered a large downswing.
Finally, crypto treasuries could distract the management team from focusing on their core business. Likewise, all the commotion around crypto may distract investors from other operational and company issues.
So, if you're buying a crypto treasury company, along with your regular due diligence, make sure to analyze the company's mission and goals and then examine the management group to see if they're pursuing them.
Like all investments, if you decide to add a crypto treasury company to your portfolio, make sure it fits within your own goals and risk tolerance. Remember to maintain a diversified portfolio that you can stick with over the long term.
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