Bitcoin Treasuries: Cool Story Bro, Now Show Us the Discipline

Key Points

1. Over 100 publicly traded companies now hold Bitcoin or other digital assets, with some aggressively raising capital to buy more, often through stock issuances.

2. MicroStrategy introduced the mNAV metric to bring discipline to Bitcoin treasury strategies, using a formula that includes enterprise value and Bitcoin NAV to guide share issuance for BTC purchases.

3. The mNAV framework is more about capital efficiency than shareholder equity, potentially masking declines in Bitcoin Per Share (BPS) even when the ratio appears healthy.

4. Bitcoin treasury strategies are highly sensitive to market cycles, performing well in bull markets but becoming liabilities during downturns, as seen in MicroStrategy's 2022 experience.

5. The article argues that Bitcoin treasuries should complement a strong core business rather than being the primary focus, warning against narrative-driven valuations without underlying substance.