Bitcoin treasury firms can outperform BTC... but is the risk worth taking?

Bitcoin treasury companies promise to outperform investing in Bitcoin alone by raising capital on traditional markets, buying Bitcoin, and attempting to increase the amount of BTC backing each share faster than the company dilutes shareholders. However, the potential upside may not outweigh the risks during a bear market. Mark Palmer, senior equity research analyst at StoneX, explains that the mechanics work both ways, and when the premium evaporates, investor enthusiasm wanes, leading to financing difficulties, debt and yield obligations, and magnified losses.

The 50 largest Bitcoin treasury companies lost $83 billion in market value since July 2025. While issuing new shares can be beneficial during a bull market, raising money below the value of the Bitcoin backing can lead to less value for shareholders. Having a prominent figure at the top, like Michael Saylor or Tom Lee, can help keep investors interested, especially when the underlying asset is in freefall.

However, many Bitcoin treasury companies essentially buy Bitcoin and hope the stock price follows, without having an exit plan when the dynamics reverse. Some argue that simpler ways to get exposure to Bitcoin, such as buying it directly or via a spot Bitcoin ETF, are more straightforward and avoid the complex financial engineering and governance risks associated with Bitcoin treasury companies.