Listed companies are quickly transformed into Bitcoin cash vehicles, raising capital to buy BTC and keep it on their balance sheets. With Bitcoin increasingly considered as a potential global reserve asset, gaining institutional traction and high expectations of price, this trend may seem solid. But there is a problem: most of these companies have acquisition plans without a business plan.
Why buy from a bonus when you can buy Bitcoin directly?
Almost all investors can buy Bitcoin directly, either in cash or via ETF. So why invest through a company listed in an important premium at the value of net assets (Nav) of his bitcoin?
The short answer is: you should not, unless the company has a clear strategy to put its bbitcoin to function in a way that investors cannot easily reproduce. BTC hold must serve an operational objective. Otherwise, the company must return the capital and let the shareholders buy Bitcoin on their own conditions.
Bitcoin Rendez ≠ business model
To justify bonuses, some analysts now use the concept of Bitcoin rendersThe percentage of increase in BTC by action over time. Although it is an interesting KPI to follow, it does not justify a NAV bonus.
Yes, if a company issues a bonus of a bonus above the NAV and buys more BTC, it can increase the BTC by action. But if the objective of an investor is to obtain the maximum exposure to Bitcoin by dollar invested, investors should simply buy BTC directly.
Long long with a limited advantage
To accelerate their acquisitions, many cash companies increase capital thanks to various types of convertible debts. The result is a long and lever effect position in Bitcoin, with complete downward exposure and a limited increase. This structure is exactly the reason why creditors are eager to take out such instruments.
If Bitcoin falls, creditors are reimbursed in USD, while the company may be forced to sell its BTC assets to cover the debt. If Bitcoin increases, creditors convert their debt to actions at reduced prices and sell them to capture the increase above the conversion price. It is upside down which would otherwise belong to the shareholders.
As an investor who chooses between the purchase in a lever-effect capital actions or simply taking a lever effect against your own BTC, you must wonder: Does the reduced increase are worth avoiding the work to do it yourself?
If the company is also negotiated with a substantial premium of its underlying bitcoin and has no operational plan beyond the purchase and detention of BTC, the answer is probably no.
The same goes for other simple risk -taking strategies, such as BTC loan in exchange for interest; They introduce the risk, but do little to justify the premium.
A business plan, not just a BTC plan
This does not mean that all Bitcoin cash companies should negotiate or below the NAV. But a bonus requires more than a funding and acquisition strategy, it requires a commercial strategy.
A solid Bitcoin assessment can be used as a powerful basis for an operational company. In finance, the balance sheets are the basis of loans, trading, structuring and even more, and some of the current companies of the Nbitcoin Treasury will probably emerge as financial giants of the future.
Brokerage, liquidity supply, guaranteed loans and structured products are all examples of operational models that can evolve, generate income and justify premium assessments.
On the other hand, the simple fact of raising funds to hunt “Bitcoin rendering” is not a business plan. If a pure play cash company does not develop an operational plan, its premium will collapse and may possibly be acquired by a company which do Know how to make Bitcoin work.
Bitcoin is the new obstacle rate. To beat the BTC, companies must do more than just buy and hold it. They must understand how to create a Bitcoin -based company.
