Bitcoin per share is among the most important metrics for evaluating a Bitcoin treasury company. It measures how much bitcoin is attributable to each common share, yet there are several ways to calculate the figure, and each method reveals something different about the economics of owning the common stock. Understanding these distinctions is essential for assessing a company's capital structure, measuring accretion, and determining the value attributable to common shareholders. Because these companies may finance bitcoin purchases with debt, warrants, or preferred stock rather than common equity alone, the calculation method chosen can materially change the picture a reported figure presents.

Raw Bitcoin Per Share

The simplest metric is raw Bitcoin Per Share (BPS).

BPS = Total Bitcoin Holdings / Common Shares Outstanding

This calculation divides a company's bitcoin holdings by its existing common shares, providing a straightforward measure of how much bitcoin backs each currently outstanding share.

Its primary limitation lies in the treatment of potential dilution. A company may carry warrants, convertible debt, or convertible preferred stock that could eventually become common shares. Because raw BPS counts only existing shares, it offers an incomplete picture of the potential future share count.

Bitcoin Per Assumed Diluted Share

Bitcoin Per Assumed Diluted Share (BPADS) addresses this limitation by incorporating the shares that would exist if all potentially dilutive securities converted into common stock.

BPADS = Total Bitcoin Holdings / Assumed Diluted Shares Outstanding

Because the assumed diluted share count is greater than or equal to the existing share count, BPADS is always less than or equal to raw BPS.

This metric became widely cited starting in 2024, particularly as Bitcoin treasury companies adopted increasingly complex capital structures. By incorporating potential dilution from outstanding securities, BPADS delivers a more conservative view of bitcoin ownership, and it becomes especially relevant for companies with substantial convertible debt, warrants, or convertible preferred stock.

However, its assumption of full conversion can be overly conservative. Warrants and convertible debt may never convert if the common stock price remains below their conversion or exercise prices, and perpetual convertible preferred stock may remain outstanding indefinitely if investors prefer collecting the preferred dividend over converting into common equity. BPADS therefore represents a fully diluted scenario rather than a forecast of the actual future share count.

Net Bitcoin Per Share

BPS and BPADS share another major limitation: they measure gross bitcoin holdings without accounting for senior claims on the company's assets. Common equity sits at the bottom of the capital structure, and debt holders and preferred shareholders generally hold priority over common shareholders according to their contractual rights. These senior claims matter because they reduce the assets ultimately attributable to common equity.

Net Bitcoin Per Share (Net BPS) addresses this by deducting the bitcoin equivalent of senior claims from total bitcoin holdings before dividing by the common share count.

Net BPS = (Total Bitcoin Holdings - Senior Claims / Bitcoin Price) / Common Shares

For example, a company with $1 billion in senior claims and a bitcoin price of $100,000 would need the equivalent of 10,000 bitcoin to satisfy those claims. Those 10,000 bitcoin would therefore be deducted from gross bitcoin holdings when calculating Net BPS.

The denominator can use either existing common shares or an assumed diluted share count, but the treatment must remain consistent: securities assumed to convert into common stock should have their extinguished senior claims removed from the numerator's deductions, avoiding a double count of the same obligation.

Should Cash Be Included?

Two useful approaches exist for calculating Net BPS.

The first applies cash and cash equivalents against senior claims before deducting the remaining obligations from bitcoin holdings.

Net BPS = [Bitcoin Holdings - (Senior Claims - Applied Cash) / Bitcoin Price] / Common Shares

Under this method, applied cash is limited to the amount available to offset senior claims. It reflects the fact that cash can satisfy obligations, preserving more bitcoin for common shareholders. This is the methodology used by Strategy to compute its mNAV, a concrete example of an issuer applying one of these per-share frameworks in practice.

The second approach deducts the full value of senior claims from bitcoin holdings and reports cash separately. Investors could, for example, examine both Net BPS and Cash Per Share. This separation provides a clearer view of the company's bitcoin exposure alongside its independent cash reserves, at a per-share level.

Both approaches are useful. Including cash produces a more comprehensive measure of residual asset value, while excluding cash makes the company's bitcoin and cash positions separately visible.

Net BPS Changes With Bitcoin's Price

A defining characteristic of Net BPS is its sensitivity to the price of bitcoin. Raw BPS and BPADS depend on bitcoin holdings and share counts; Net BPS additionally depends on bitcoin's market price because senior claims are generally denominated in dollars.

As bitcoin appreciates, fewer bitcoin are required to cover a fixed dollar obligation, leaving more bitcoin attributable to common shareholders. When bitcoin depreciates, the opposite occurs. Net BPS therefore rises with bitcoin's price and falls when the price declines, assuming fixed senior claims, holdings, and share counts.

This relationship creates both a challenge and an important advantage.

Challenge: Measuring Accretion Correctly

The challenge is that changes in Net BPS over time combine the effects of corporate actions with movements in bitcoin's market price. A rising bitcoin price can increase Net BPS even when a company's financing decisions destroy value for common shareholders, while falling bitcoin prices can obscure the benefits of genuinely accretive transactions. Directly comparing observed Net BPS figures across different dates is therefore an unreliable method of evaluating management's capital allocation decisions.

However, raw BPS and BPADS are also inadequate measures of economic accretion. Consider a company issuing debt to purchase bitcoin: any positive amount of bitcoin purchased with debt increases raw BPS because bitcoin holdings rise while common shares remain unchanged, regardless of the debt's interest rate or repayment obligations. Similarly, issuing preferred stock to purchase bitcoin increases raw BPS even if the preferred stock is issued at a substantial discount to par and carries expensive dividend obligations. These transactions increase gross bitcoin ownership per common share while potentially reducing the residual value attributable to common shareholders.

The proper way to measure economic accretion is to compare Net BPS before and after a transaction while holding the bitcoin price constant. This isolates the effects of changes in bitcoin holdings, senior claims, cash, and share count, revealing whether a corporate action genuinely increases the bitcoin equivalent of the residual assets attributable to each common share.

Advantage: Net BPS as a Measure of Common Equity Liquidation Value

Perhaps the greatest advantage of Net BPS is its connection to the economic value of common equity. When bitcoin is a company's primary treasury asset, Net BPS calculated with the appropriate cash adjustment approximates the bitcoin-denominated liquidation value attributable to each common share.

(Note: liquidation value here refers to the value common stockholders would be entitled to if they liquidated the company, paid off all claims, and divided the remainder among themselves. It has nothing to do with the "liquidation value" associated with leveraged, margin-callable trading positions. Actual recoveries in a real liquidation depend on the precise terms of senior securities, other assets and liabilities, liquidation expenses, and the taxable proceeds realized from asset sales.)

Multiplying Net BPS by the bitcoin price converts this amount into dollars, allowing investors to compare that figure with the common stock's market price and measure the premium or discount at which the shares trade relative to their estimated residual asset value.

This is an advantage BPS and BPADS cannot offer. Because Net BPS accounts for senior claims, it provides a more direct measure of the assets that ultimately belong to common shareholders, making it the most relevant basis for comparison with the common stock's market price. This connection to common equity liquidation value also explains why accretion is best measured through changes in Net BPS at a constant bitcoin price: holding the price constant isolates the impact of corporate actions on the residual asset value attributable to each common share. And because Net BPS factors in both senior claims and common stock, it accounts for the impact of all corporate actions involving the issuance or repurchase of securities interests, projecting those effects onto the common stock.

Conclusion

Each Bitcoin per share metric serves a distinct purpose. Raw BPS measures gross bitcoin holdings attributable to existing common shares, BPADS incorporates potential dilution, and Net BPS accounts for senior claims, measuring the residual bitcoin value attributable to common equity.

For evaluating the capital stack, Net BPS is the most comprehensive of the three. Holding bitcoin's price constant allows investors to isolate the economic effects of financing transactions and assess genuine accretion, and Net BPS provides a direct connection between the company's balance sheet and the market value of its common stock. For readers applying these metrics to real companies, the practical checkpoints are which share count a reported figure uses, which senior claims are deducted, and how cash is treated — details that determine which of these metrics a headline number actually represents.

Disclaimer: This content was prepared on behalf of Bitcoin For Corporations for informational purposes only. It reflects the author's own analysis and opinion and should not be relied upon as investment advice. Nothing in this article constitutes an offer, invitation, or solicitation to purchase, sell, or subscribe for any security or financial product.

This article, Understanding the Various Bitcoin Per Share Metrics, first appeared on Bitcoin Magazine and is written by Allard Peng.