The Bitcoin treasury model, popularized by MicroStrategy's early adoption of Bitcoin as a corporate reserve asset in 2020, is facing increasing strain in 2025. While over 250 organizations, including public companies, private firms, ETFs, and pension funds, now hold Bitcoin on their balance sheets, the model's reliance on sustained Bitcoin price appreciation exposes companies to significant risks.
The core thesis of the Bitcoin treasury model involves raising capital, converting it into Bitcoin, and waiting for long-term appreciation. However, a company's stock price can become vulnerable if it falls too close to or below the value of its underlying Bitcoin holdings, measured by the Bitcoin-per-share metric or net asset value (NAV). This can trigger a "BTC NAV death spiral," where declining prices erode NAV, cut off equity or debt funding, and force distressed companies to sell their Bitcoin, accelerating the downturn. Franklin Templeton analysts have warned of a "particularly dangerous scenario" involving a negative feedback loop where companies are forced to sell assets to defend their stock price, further depressing crypto values and investor confidence.
MicroStrategy, now rebranded as Strategy, stands out due to its unique approach and long-term vision. The company has transformed from a business intelligence vendor into a leveraged Bitcoin investment vehicle, wrapped around its software business. Strategy's Bitcoin strategy remains the most high-profile, with the company aiming to accumulate 1 million Bitcoin, representing 4.76% of Bitcoin's maximum supply. As of July 2025, Strategy holds 601,550 BTC in its reserves, valued at approximately $74.05 billion.
Strategy's success lies in its ability to maintain a premium to NAV, continue accretive transactions, and navigate market volatility. The company has strategically used structured capital raises, including selling common and preferred stock, to fund its Bitcoin acquisitions while minimizing dilution for common shareholders. The preferred stock offerings, featuring dividend yields ranging from 8% to 10%, have been well-received, reflecting investor confidence. Moreover, Strategy's innovative funding strategy helps Bitcoin's price rise and increases the MSTR stock price, which allows the company to raise even more money and buy more Bitcoin.
The company's investment thesis is built on Bitcoin's fixed supply of 21 million coins. By accumulating Bitcoin, Strategy aims to leverage this scarcity to create substantial value for its shareholders. The company's Bitcoin holdings surpass the reserves of several nations and are narrowing the gap with BlackRock's iShares Bitcoin Trust (IBIT).
Despite the potential risks, Strategy's Bitcoin strategy has proven profitable, with an unrealized return of 68% on its Bitcoin holdings and a year-to-date yield of 20.2% for 2025. The company's ability to raise capital at a premium to net asset value allows it to issue shares at prices higher than the value of its underlying crypto assets, making equity issuance accretive even amid crypto volatility.
However, some analysts argue that Strategy's Bitcoin strategy only works if the digital currency keeps rising. Economist Steve Hanke has criticized crypto treasury strategies, stating that companies swapping productive investments for Bitcoin "treasuries" are playing roulette. He argues that Bitcoin and Ethereum treasuries have no business model because BTC has no fundamental value.
Despite the criticisms, Strategy's management believes in Bitcoin as a superior store of value compared to traditional fiat currencies, especially amid inflationary pressures and economic uncertainty. The company's strategic purchases and occasional sales reflect a dynamic approach to balancing liquidity needs and long-term investment goals. Moreover, Strategy is transforming how companies approach their treasury reserve strategy and provides open-source documents to help others navigate a corporate Bitcoin strategy.
