New Trend Among Listed Companies: A Comprehensive Deconstruction of the Crypto Assets Reserve Economic Model

Introduction

By mid-2025, an increasing number of publicly listed companies began to incorporate Crypto Assets (, especially Bitcoin ), into their treasury asset allocation. This trend has been inspired by several successful cases. For instance, data shows that in June 2025 alone, 26 new companies added Bitcoin to their balance sheets, bringing the total number of companies holding BTC globally to around 250.

These companies span multiple industries ( technology, energy, finance, education, and more ) in different countries and regions. Many companies view Bitcoin's limited supply of 21 million as a hedge against inflation and emphasize its low correlation with traditional financial assets. This strategy is quietly going mainstream: as of May 2025, 64 SEC-registered companies collectively held approximately 688,000 BTC, accounting for about 3-4% of Bitcoin's total supply. Analysts estimate that over 100-200 companies worldwide have incorporated Crypto Assets into their financial statements.

Crypto Assets Reserve Model

When a publicly traded company allocates part of its balance sheet to Crypto Assets, a core question arises: how did they finance the purchase of these assets? Unlike traditional financial institutions, most companies that adopt a crypto treasury strategy do not rely on a cash-rich core business to support this. The following analysis will use a certain trading platform as a primary example, as most other companies are actually replicating its model.

Operating Cash Flow (

Although theoretically the "healthiest" and least dilutive way is to use free cash flow generated by the company's core business to purchase Crypto Assets, in reality, this method is almost unfeasible. Most companies themselves lack sufficient, stable, and large-scale cash flow and are unable to accumulate a significant reserve of BTC, ETH, or SOL without relying on external financing.

Taking a certain trading platform as a typical example: the company was established in 1989 and originally focused on commercial intelligence as a software enterprise, with its main products including HyperIntelligence, AI analytics dashboards, and others. However, these products have so far only generated limited revenue. In fact, the company's annual operating cash flow is negative, which is far from the scale of hundreds of billions of dollars it has invested in Bitcoin. Thus, it can be seen that the company's encryption treasury strategy was not based on internal profitability from the very beginning, but relied on external capital operations.

Similar situations also appear in other companies. These companies clearly cannot rely on the income from their B2B gaming business to carry out this operation. Their capital formation strategy mainly relies on PIPE financing ) private equity public stock ( and direct stock issuance, rather than operating income.

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) capital market financing

Among publicly traded companies that adopt encryption vault strategies, the most common and scalable method is through public market financing ### public offering (, by issuing stocks or bonds to raise funds, which are then used to purchase Bitcoin and other Crypto Assets. This model allows companies to build large-scale encryption vaults without utilizing retained earnings, fully leveraging the financial engineering methods of traditional capital markets.

) Issuing stocks: Traditional dilution financing case

In most cases, issuing new shares comes with costs. When a company raises funds by issuing additional shares, two things usually happen:

1. Ownership is diluted: The shareholding ratio of existing shareholders in the company decreases.
2. Earnings per share ### EPS ( decreased: The increase in total shares led to a decrease in EPS while net profit remained unchanged.

These effects usually lead to a decline in stock prices, mainly for two reasons:

• Valuation logic: If the price-to-earnings ratio ) P/E ( remains unchanged, while EPS declines, the stock price will also fall.
• Market Psychology: Investors often interpret financing as a sign that the company lacks funds or is in trouble, especially when the raised funds are used for unproven growth plans. Additionally, the influx of new stocks into the market creates supply pressure that can lower market prices.

) An exception: the anti-dilution equity model of a certain trading platform

A certain trading platform is a typical counterexample to the traditional narrative of "equity dilution = shareholder loss." Since 2020, the company has actively purchased Bitcoin through equity financing, with its total outstanding shares growing from less than 100 million to over 224 million by the end of 2024.

Despite the dilution of equity, the company's performance often surpasses that of Bitcoin itself. Why? Because the company has long been in a state of "market value greater than its net Bitcoin value," which we refer to as mNAV > 1.

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) Understanding Premium: What is mNAV?

• When mNAV > 1, the market values the company higher than the fair market value of its held bitcoins.

In other words, when investors gain exposure to Bitcoin through the company, the price paid per unit is higher than the cost of directly purchasing BTC. This premium reflects the market's confidence in the company's capital strategy and may also represent the market's belief that the company offers leveraged, actively managed BTC exposure.

support of traditional financial logic

Although mNAV is a crypto-native valuation metric, the concept of "the trading price being higher than the underlying asset value" has long been prevalent in traditional finance.

The reasons why the company often trades at prices higher than its book value or net assets are mainly as follows:

Discounted Cash Flow ### DCF ( Valuation Method

Investors are focused on the present value of the company's future cash flows ), rather than just the assets it currently holds.

This valuation method often results in a company's trading price being significantly higher than its book value, especially in the following situations:

• Expected growth in revenue and profit margins
• The company possesses pricing power or a technological/commercial moat.

Example: The valuation of a certain technology company is not based on its cash or hardware assets, but rather on its future stable subscription software cash flow.

Profit and Income Multiple Valuation Method ( EBITDA )

In many high-growth industries, companies typically use the P/E( price-to-earnings ratio) or revenue multiples for valuation:

• High-growth software companies may trade at multiples of 20-30 times EBITDA.
• Early-stage companies may trade at 50 times revenue or higher, even without profits.

Example: A certain e-commerce company had a price-to-earnings ratio as high as 1078 times in 2013.

Despite slim profits, investors are still betting on its future dominance in the e-commerce and cloud computing sectors.

A certain trading platform has advantages that Bitcoin itself does not possess: a corporate shell that can access traditional financing channels. As a publicly traded company in the United States, it can issue stocks, bonds, and even preferred equity ( to raise cash, and it has indeed done so, with remarkable results.

The company's CEO cleverly utilizes this system: he raised billions of dollars by issuing zero-interest convertible bonds ) zero-percent convertible bonds (, and the recently launched innovative preferred stock products, and invested all of these funds into Bitcoin.

Investors recognize that the company can leverage "other people's money" to purchase Bitcoin on a large scale, an opportunity that is not easily replicated by individual investors. The company's premium "is not related to short-term NAV arbitrage" but stems from the market's high trust in its capital acquisition and allocation capabilities.

) mNAV > 1 How to achieve anti-dilution

When the trading price of a trading platform is higher than its net asset value of held Bitcoin (, i.e., mNAV > 1), the company can:

1. Issue new shares at a premium price
2. Use the raised funds to purchase more Bitcoin ###BTC(
3. Increase total BTC holdings
4. Promote the simultaneous increase of NAV and Enterprise Value ) Enterprise Value (

Even with an increase in the circulating shares, the BTC holding per share )BTC/share( may remain stable or even rise, making the issuance of new shares a anti-dilution operation.

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) What happens if mNAV < 1?

When mNAV < 1, it means that the BTC market value represented by each dollar of the company's stock exceeds 1 dollar ( at least on paper ).

From the perspective of traditional finance, the company is trading at a discount, that is, below its net asset value ###NAV(. This poses challenges in capital allocation. If the company finances with stock in this situation to buy BTC, from the shareholders' perspective, it is actually buying BTC at a high price, thus:

• Diluted BTC/share ) per share BTC holding (
• and reduce the value of existing shareholders

When a company faces the situation where mNAV < 1, it will be unable to maintain the "issue new shares → purchase BTC → increase BTC/share" flywheel effect.

Then what choices are left at this time?

) repurchase stocks instead of continuing to buy BTC

When mNAV < 1, repurchasing company stock is a value-accretive action (, for reasons including:

• You are repurchasing stocks at a price lower than its intrinsic value in BTC.
• As the number of circulating shares decreases, BTC/share will rise.

The company's CEO has made it clear that if mNAV falls below 1, the best strategy is to repurchase stocks instead of continuing to buy BTC.

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( Method 1: Issue Preferred Stock )

Preferred stock is a hybrid security that lies between debt and common stock in a company's capital structure. It typically offers fixed dividends, has no voting rights, and has priority over common stock in profit distribution and liquidation. Unlike debt, preferred stock does not require repayment of principal; unlike common stock, it can provide more predictable income.

A trading platform has issued three types of preferred shares: STRK, STRF, and STRC.

STRF is the most straightforward tool: it is an irredeemable perpetual preferred stock that pays a fixed cash dividend of 10% annualized based on a face value of $100. It does not have an equity conversion option and does not participate in the company's stock appreciation, providing only income.

The market price of STRF will fluctuate around the following logic:

• If the company needs financing, it will issue more STRF, thereby increasing supply and lowering prices;
• If the market's demand for returns surges ( as in periods of low interest rates ), the price of STRF will rise, thereby lowering the effective yield;
• This forms a self-adjusting price mechanism, with a typically narrow price range, for example $80-$100, driven by yield demand and supply and demand.

Example: If the market requires a 15% return, the STRF price may fall to $66.67; if the market accepts 5%, it may rise to $200.

Since STRF is an non-convertible, essentially non-redeemable instrument ### unless triggered by tax or capital conditions (, its behavior is similar to that of perpetual bonds, allowing the company to repeatedly "bottom fish" BTC without the need for refinancing.

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STRK is similar to STRF, with an annual dividend of 8%, but it adds a key feature: it can be converted to common stock at a 10:1 ratio when the company's stock price exceeds $1,000.