Analysis of the Crypto Assets Reserve Economic Model of Listed Companies

More and more publicly listed companies are starting to incorporate Crypto Assets into their asset allocation. As of June 2025, approximately 250 companies worldwide hold Bitcoin, accounting for 3-4% of the total Bitcoin supply. These companies span multiple industries and view Bitcoin as a tool to hedge against inflation.

Crypto Assets Reserve Model

Most companies do not rely on cash flow from their core business to purchase Crypto Assets, but rather finance through capital markets. Taking MicroStrategy(MSTR) as an example, it mainly raises funds to purchase Bitcoin by issuing stocks or bonds.

issue stocks

Typically, issuing new shares dilutes the equity of existing shareholders, leading to a decrease in earnings per share and a drop in stock prices. However, MSTR is an exception, as its stock price often performs better than Bitcoin itself. This is because MSTR has long been in a state where "market value exceeds the net value of its held Bitcoin," that is, mNAV > 1.

mNAV = MSTR market value / ( MSTR held BTC market value - liabilities )

When mNAV > 1, the market values MSTR higher than the fair market value of the Bitcoin it holds. This premium reflects the market's confidence in the company's strategy.

issue convertible bonds

Convertible bonds are one of the most commonly used financing instruments by MSTR. They combine the downside protection of bonds with the upside potential of stocks. In a high-volatility environment, investors may even be willing to accept 0% interest, focusing solely on the value of the embedded call option.

MSTR is essentially "selling volatility" and doing so at a premium. The market is willing to pay upfront for future growth potential, allowing the company to continue financing the purchase of coins without paying interest or immediately diluting shareholders.

Gamma Trading

Hedge funds are arbitraging by buying convertible bonds while shorting MSTR stock. This strategy is called Gamma Trading, allowing funds to profit from volatility rather than directional changes.

The short float of MSTR ( is relatively high due to a large number of funds engaging in Gamma Trading. In contrast, companies that have not issued convertible bonds have a significantly lower short float.

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Crypto Assets Allocation Trends

Apart from Bitcoin, more and more companies are starting to use Ethereum as a reserve asset. Reasons include:

1. ETH is regarded as the infrastructure for tokenizing real-world assets.
2. ETH can be staked to earn interest, featuring programmable and interest-bearing characteristics.
3. The launch of the Ethereum ETF has enhanced institutional confidence.

Some companies have even started to allocate XRP, Litecoin, and other Crypto Assets, showing that the allocation of Crypto Assets is diversifying.

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Summary

MicroStrategy has pioneered a new corporate finance model, transforming public companies into leveraged Bitcoin holding tools. Its core mechanism is: when mNAV > 1, financing is obtained by issuing stocks or convertible bonds, and then all funds are converted into BTC.

The limitation of this model is that once the volatility decreases, the attractiveness of convertible bonds will be significantly reduced. The arbitrageurs supporting the financing ecosystem may quickly withdraw, leading to the failure of the entire financing mechanism.

Nonetheless, investing in MicroStrategy has become a new trend for both institutions and retail investors, viewing it as an alternative trading option to the rise of Bitcoin. MicroStrategy not only adopts Bitcoin as a reserve but has also built a whole new financial structure around Bitcoin, which may define a new paradigm for future corporate treasury asset allocation.

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