Investment in Bitcoin by Treasury Departments: Public Relations Stunt or Strategic Move?
As Bitcoin ascends the financial landscape, an escalating number of public companies are amassing the digital gold – but not without stirring controversy.
With pioneers like MicroStrategy and Metaplanet all-in on Bitcoin accumulation, others are treading cautiously, often as a hedge against inflation, skyrocketing interest rates, and fiat devaluation. Yet, critics caution that these corporations might be on shaky financial ground, using Bitcoin more as a speculative lifeline than a strategic asset.
The meteoric rise of corporate Bitcoin hoards reflects both the allure and danger of crypto's expanding influence in global capital markets. According to BitBo, as of June 6, over seventy public companies were keeping Bitcoin. Firms like Strategy and Metaplanet are undoubtedly committed to hoarding the crypto. Still, many other organizations are merely dipping their toes into the Bitcoin pool while continuing their work elsewhere.
'A Pandora's Box on the Brink'
Sean Williams, a journalist and analyst, voiced concerns over the possible underperformance of Bitcoin treasury companies, citing lack of innovation and operational success as the driving forces behind potential busts. He dubbed the BTC treasury hype as a "Pandora's Box on the brink."
He underscored that many companies drawn to BTC treasuries aren't profitable to start. They seek quick crypto gains from volatility, emphasizing their weaknesses. Strategy's stock performance was one of the worst in February 2025.
Williams pointed to instances of sharp Bitcoin price drops as an example of the potential peril for such companies. On top of that, he sees the scarcity and 21 million hard cap narratives as "mythical," due to the potential possibility of changing the Bitcoin limit. Technically, it's not impossible. When BlackRock outlined such a possibility in the company's educational animation, the reaction from Bitcoin maximalists was hostile.
Coin Bureau founder Nic Puckrin also expressed doubts that "random" companies launching Bitcoin treasuries won't sell their BTC during bear markets. Thus, he raises concerns about these companies' shallow engagement in Bitcoin and warns of potential harm to the crypto market.
'Time to Discuss the Supply Cap'
Adopting corporate Bitcoin treasuries has strong macroeconomic foundations, despite veteran crypto enthusiasts grumbling about Bitcoin being appropriated by the new, deep-pocketed investors.
In a comprehensive Fidelity study, analysts highlight the last five years as a period of increasing interest in publicly traded companies allocating capital to Bitcoin. They argue that facing escalating fiscal deficits, fiat debasement, and geopolitical turmoil, corporations seek new hedging strategies.
The study notes that the high interest rates of the 2020s drained companies' liquidity and cash flows, necessitating unconventional capital approaches. However, if interest rates drop, the yields of companies holding substantial traditional funds will also plummet.
The post-COVID-19 stimulus payments, amounting to a staggering $10 trillion – three times higher than during the 2008 crisis period – fueled inflation rates, eroding corporate treasury purchasing power. These factors led many investors to seek novel solutions, and soon many, including public companies, discovered Bitcoin as their salvation. Given the Bitcoin-friendly regulations in the EU and the U.S., investors acquired digital assets with newfound confidence.
The study cites several supportive regulations such as:
- The Securities and Exchange Commission's approval of Bitcoin ETFs
- The EU's MiCA framework adoption
- The Financial Accounting Standards Board's rule change from 2023, which allowed Bitcoin holding companies to account for and represent value in their financial statements more accurately. Given the surging Bitcoin price, it made companies' balance sheets appear stronger.
As Bitcoin has proved resistant to demand shocks and could serve as a financial shelter in the long run, it promised benefits for companies incorporating the coin into their balance sheets. According to Fidelity, Bitcoin can help companies weather central banks' monetary debasement policies due to its verifiable scarcity.
Analysts generally agree that Bitcoin's long-term price appreciation has fueled its popularity among corporations. The study mentions the companies pioneering such allocation: The Block, MicroStrategy, Stone Ridge Holdings Group, and Selmer Scientific.
'Survival of the Fittest'
While FOMO and game theory often appear in discussions about reserves, these reserves reduce liquidity, heightening an asset's deficit on the markets — without automatically elevating the price (as people soon grew accustomed to "bullish" announcements). The trend is still young, but it must go through a "survival test" to determine if the Bitcoin-stashing companies are not merely tourists.
- Critics like Sean Williams question the financial stability of corporations accumulating Bitcoin, warning that they might be using it as a speculative lifeline rather than a strategic asset.
- Many organizations are merely experimenting with Bitcoin while continuing their core operations, as evidenced by companies like Strategy whose stock performance was one of the worst in February 2025.
- Nic Puckrin, founder of Coin Bureau, expresses doubts about companies without deep Bitcoin engagement selling their Bitcoin during bear markets, which could harm the crypto market.
- Achieving Bitcoin's supply cap of 21 million is theoretically possible, and Fidelity analysts suggest this potential change could be implemented to address the scarcity issue raised by critics.
- The surging popularity of corporate Bitcoin treasuries among public companies was fueled by inflation, increasing fiscal deficits, and geopolitical turmoil, driving corporations to seek new hedging strategies such as Bitcoin.
- Binance, along with The Block, MicroStrategy, Stone Ridge Holdings Group, and Selmer Scientific, are examples of companies pioneering corporate Bitcoin treasuries, a trend that is undergoing a "survival test" to determine its sustainability.
