Bitcoin (BTC) has rapidly gained traction as a valuable treasury asset for public companies, a trend significantly influenced by MicroStrategy’s (MSTR) groundbreaking decision to integrate bitcoin into its corporate treasury in August 2020. MicroStrategy’s initial foray into the cryptocurrency space resulted in a staggering over 800% increase in its stock value, setting a precedent that has inspired other companies to adopt similar strategies.

As of now, according to BitcoinTreasuries.net, public companies collectively hold approximately 354,316 BTC, which represents about 1.69% of the total bitcoin supply capped at 21 million. This growing trend highlights the increasing recognition of bitcoin not just as a digital currency, but as a viable asset for treasury management.

Corporate Adoption of Bitcoin

The move by MicroStrategy has sparked a wave of interest among corporations looking to diversify their asset portfolios and shield themselves from the erosive effects of inflation. This has led to several companies following suit by incorporating bitcoin into their treasury strategies. Notable examples include:

• Metaplanet (3350)
• Semler Scientific (SMLR)
• Cathedra Bitcoin (CBIT)

Cathedra Bitcoin’s Strategic Shift

Cathedra Bitcoin, a publicly traded company on the TSX Venture Exchange in Canada, has recently made a pivotal strategic shift. Originally focused solely on bitcoin mining, the company has transitioned towards developing and operating data centers. This change arises from the increasing challenges faced by the mining industry, particularly in light of the upcoming bitcoin halving event.

The Hashrate index, which tracks bitcoin mining revenue, currently stands at a relatively low 43 PH/s (petahash/second), with an all-time low recorded at 36 PH/s. Such conditions have put immense pressure on public miners, forcing many to reconsider their operational strategies as they navigate an increasingly competitive landscape.

In light of these challenges, Cathedra Bitcoin’s new focus aims at maximizing its bitcoin holdings per share by shifting away from the high-cost mining operations. This strategy not only seeks to create a sustainable cash flow but also positions the company for long-term growth in bitcoin holdings. In their latest communications, Cathedra stated, “Going forward, we will make all capital allocation decisions with the intention of maximizing our shareholders’ per-share bitcoin holdings.”

Metaplanet’s Growth Strategy

Similarly, Metaplanet is also actively engaged in the bitcoin treasury space, with a strategic emphasis on increasing its bitcoin holdings. Led by CEO Simon Gerovich, the company has made it a priority to grow its bitcoin assets consistently each month. This approach has yielded significant financial gains, as evidenced by a remarkable 587% increase in Metaplanet’s stock value year-to-date. This performance reflects the market’s positive reception of the company’s strategic pivot towards bitcoin accumulation.

MicroStrategy’s Continued Leadership

MicroStrategy remains the pioneer and the most significant player in the bitcoin treasury space. Under the visionary leadership of Michael Saylor, the company continues to innovate and expand its adoption of bitcoin. On September 18, MicroStrategy announced the pricing of an $875 million convertible senior notes offering, which was upsized from an initial $700 million. These notes carry a modest 0.625% interest rate and are set to mature in 2028.

The proceeds from this offering will be strategically allocated to redeem $500 million in high-interest 6.125% senior secured notes, thereby reducing the company’s overall interest burden. The remaining funds will be utilized to acquire additional bitcoin, further solidifying MicroStrategy’s position as a leader in the treasury bitcoin space.

Innovative Concepts and Bitcoin Yield

In a recent 8-K filing, MicroStrategy introduced a novel concept termed “bitcoin yield.” This metric measures the percentage change in the company’s bitcoin holdings relative to its assumed diluted shares outstanding, which includes both Class A and Class B shares. From January 1 to September 12, the company’s bitcoin yield was recorded at 17%, with a quarter-to-date yield of 4.4%.

According to the MSTR-tracker, the bitcoin per share ratio currently stands at approximately 0.0012. This metric indicates that long-term shareholders are experiencing an accretive value in their bitcoin holdings, reinforcing the attractiveness of bitcoin as a treasury asset. As more public companies recognize the benefits of holding bitcoin, its role as a treasury asset is poised to grow, influencing corporate strategies and financial markets alike.