There are now 179 listed companies holding Bitcoin on their balance sheets. Their strategies generally follow the same formula popularized by Strategy: raise capital in traditional markets, use the proceeds to buy Bitcoin and increase the amount of BTC backing each share faster than shareholder dilution reduces it.

Mark Palmer, managing director and senior equity research analyst at StoneX, said this is how treasury companies attempt to “beat” Bitcoin’s returns.

The strategy is easier to execute when Bitcoin’s price is rising and investors are willing to finance additional purchases. But the mechanics work in both directions. When a company’s premium disappears, investor enthusiasm can weaken, financing becomes more difficult, and debt and yield obligations remain. The same structure that magnifies gains when the asset rises can amplify losses when it falls.

The 50 largest Bitcoin treasury companies have lost $83 billion in market value since July 2025. Recent shareholder backlash at Metaplanet has also highlighted the questions that arise when treasury companies dilute their shareholders too heavily.

Treasury companies may be more likely to need new funding during bear markets, creating a potential problem. Palmer said:

“Issuing shares at a premium to net asset value and buying Bitcoin with the proceeds increases the Bitcoin backing every existing share. The same issuance at a discount destroys value.”

That raises the central question for investors: Are the outsized returns available during a bull market worth the downside risks that can emerge during a bear market?

The math works until capital markets stop cooperating

Despite the complexity surrounding Bitcoin treasury companies, the basic test for investors is relatively straightforward: Do shareholders end up with more Bitcoin backing each share over time?

Palmer said investors should look beyond the headline amount of Bitcoin a company holds and instead focus on “Bitcoin per fully diluted share, net of debt and preferred stock claims.”

There were 179 Bitcoin treasury companies as of September 2026, according to SatsIntel.

Issuing new shares is not automatically a problem. The important issue is whether the capital raised generates enough additional value and profit for the benefits to existing shareholders to outweigh the dilution.

If a company issues shares for more than the value of the Bitcoin backing those shares and uses the proceeds to buy more Bitcoin, shareholders may end up with more Bitcoin per share. If the company raises funds below that value, shareholders may end up with less.

That dynamic was particularly favorable for Strategy during the last Bitcoin bull market, according to Adam Morgan McCarthy, a researcher at LO:TECH and former head of research at Kaiko. Bitcoin was rising rapidly, he said, allowing the company to raise additional financing.

“They were able to take on new debt. They were able to issue new debt because of that,” McCarthy said.

The first-mover advantage

Selecting the right digital asset treasury company is a key decision. With a couple of hundred now available, longer-established companies have an advantage, McCarthy said:

“It’s a first-mover advantage, right? Like if you’re Michael Saylor or you’re Bitmine and you’ve got this sort of larger-than-life character at the top, it’s a bit different.”

Strategy executive chairman Michael Saylor has become closely associated with the treasury-company model. McCarthy said Saylor can keep the story moving even when Bitcoin’s price is not. Ethereum treasury company Bitmine has a similarly prominent figure in Tom Lee.

Bitcoin and other cryptocurrencies rise and fall partly on narratives. Having a prominent storyteller can help maintain investor interest, particularly when the underlying asset is falling sharply. But McCarthy warned:

“I don’t think there’s enough room for a hundred Michael Saylors; there’s not enough people like that around.”

Many companies that followed Strategy were essentially buying Bitcoin and hoping their stock price would follow, McCarthy said. They “didn’t have an exit plan” for when market dynamics reversed, and he expects the eventual shakeout to be even more severe.

“I think it’s going to flush out like 95% of it,” he said.

The corporate wrapper carries additional obligations

Investors can obtain Bitcoin exposure through simpler methods, including buying the asset directly on an exchange or using a spot Bitcoin exchange-traded fund (ETF).

Spot ETFs allow traditional-finance investors to buy Bitcoin through a conventional brokerage account without taking on the management, financing-structure and governance risks associated with a digital asset treasury company.

Palmer said complex financial engineering can be difficult for retail investors to understand. He identified a key risk in Bitcoin treasury company stocks:

“The biggest risk that investors face in buying Bitcoin treasury company stocks is forgetting that common shareholders’ claim is a residual one, as convertible debt and perpetual preferred stock sit ahead of them in terms of priority.”

Those instruments, he added, “carry cash obligations that Bitcoin itself doesn’t generate.”

Can treasury companies beat Bitcoin?

Matt Cole, chief executive of Strive, one of the largest Bitcoin treasury companies, said investors should assess the companies’ performance directly. He said:

“Strategy has dramatically outperformed Bitcoin since adopting its strategy. Metaplanet has also outperformed Bitcoin since inception and Strive has outperformed Bitcoin both since announcing our strategy in May 2025 and year-to-date in 2026.”

Cole added that “Strive has not sold a single Bitcoin, and during a Bitcoin bear market we have increased our holdings approximately fourfold while outperforming Bitcoin.”

David Bailey, chief executive of Nakamoto, made a similar argument about Metaplanet. In a post on X, Bailey said Metaplanet was “the best performing equity in the world for nearly two years” and was “up 1,300% from genesis.” Source: David Bailey, https://x.com/DavidFBailey/status/2097398555778421224

Despite those returns to date, debt maturities and yield obligations could still create problems later. Companies without comparable access to capital, investor followings or balance-sheet strength have already seen how quickly the strategy can turn against them.

Two prominent examples are Bailey’s own Nakamoto Inc., whose stock fell 99% from its 2025 peak, and UK-based Satsuma Technology, which experienced a similar decline.

For readers weighing exposure to the sector, the same variables that shaped those outcomes double as the clearest markers to watch: whether a company’s shares trade at a premium or a discount to the Bitcoin backing them, how it services debt maturities and yield obligations as they come due, and whether further dilution draws the kind of shareholder pushback seen at Metaplanet.

McCarthy’s personal view also illustrates the distinction between holding Bitcoin and owning a treasury company. Asked how he would deploy $100,000 for Bitcoin exposure, he said he would “mostly buy an ETF” and might allocate a smaller amount to Strategy “for the vol.”

Ultimately, buying Bitcoin is a bet on Bitcoin. Buying a Bitcoin treasury company is a bet on Bitcoin plus an additional bet on the people, financing structure, balance sheet and corporate governance surrounding the asset.

Related: Metaplanet moves 4,800 BTC worth $377M to Coinbase Prime

Related: Strategy raises $334M through stock sales but buys no Bitcoin

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