Investing in companies like MicroStrategy (MSTR) that hold Bitcoin on their balance sheets has become one of the most discussed trends in public markets. While investors have multiple ways to gain direct exposure to Bitcoin—such as ETFs, spot holdings, wrapped tokens, or futures contracts—many still opt to buy shares of Bitcoin-reserve corporations, even when these stocks trade at a significant premium to their underlying Bitcoin value.
This premium refers to the difference between a company’s stock price and its Bitcoin Net Asset Value (NAV). For example, if a firm holds $100 million in Bitcoin and has 10 million shares outstanding, its Bitcoin NAV per share is $10. If the stock trades at $17.50, the premium is 75%. In this context, the mNAV (multiple to NAV) reflects how many times the share price exceeds the Bitcoin NAV per share.
Why would rational investors pay more for a company’s stock than the Bitcoin it holds? The answer lies in strategic advantages beyond mere ownership.
Leverage and Access to Capital Markets
A primary reason for the premium valuation of Bitcoin-reserve companies is their ability to use public capital markets for leverage. These firms can raise funds through debt or equity offerings to acquire more Bitcoin. In essence, they act as high-beta proxies for Bitcoin, amplifying its price movements.
One commonly used tool is the “At-The-Market” (ATM) equity offering program. This mechanism allows a company to issue new shares incrementally at prevailing market prices with minimal disruption. When the stock trades at a premium to Bitcoin NAV, each dollar raised through an ATM offering can buy more Bitcoin than the amount of dilution caused per share. This creates a virtuous cycle of increasing Bitcoin holdings per share.
MicroStrategy offers a compelling case study. Since 2020, the company has raised billions through convertible bonds and secondary equity offerings. As of June 30, it held 597,325 Bitcoin—approximately 2.84% of the circulating supply.
Such fundraising tools are only accessible to publicly listed companies, allowing them to compound their Bitcoin acquisitions over time. By investing in MSTR, shareholders aren’t just buying Bitcoin—they are buying the company’s ability to continually increase its Bitcoin holdings.
How Large Is the Premium?
The following examples illustrate the premium levels among several Bitcoin-reserve companies. MicroStrategy is the best-known representative with the largest holdings. Metaplanet is among the most aggressive accumulators, while Semler Scientific adopted this strategy early. France’s The Blockchain Group shows the trend expanding beyond the U.S.
- MicroStrategy: Premium ~75%
- The Blockchain Group: Premium ~217%
- Metaplanet: Premium ~384%
- Semler Scientific: Premium ~33%
These valuations suggest that the market is pricing not only Bitcoin's appreciation potential but also the companies’ capital market access, speculative appeal, and narrative value.
Bitcoin Yield: The Engine Behind the Premium
A key metric driving these premiums is “Bitcoin yield,” which measures the growth in Bitcoin holdings per share over time. It reflects how efficiently a company uses raised capital to accumulate more Bitcoin without excessive share dilution.
Metaplanet stands out for its transparency, providing a real-time dashboard that updates its Bitcoin holdings, NAV, and yield metrics. The company also publishes a proof-of-reserves, allowing investors to verify holdings on-chain—a practice not yet universally adopted.
In contrast, MicroStrategy has not embraced on-chain verification. At the "Bitcoin 2025" conference, Executive Chairman Michael Saylor argued that publishing proof-of-reserves could create security risks. However, this is a contested view since Bitcoin’s design allows public address sharing without compromising private keys. On-chain transparency offers investors direct validation and builds trust.
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What Happens If the Premium Vanishes?
So far, high valuations for Bitcoin-reserve companies have persisted in a bullish market characterized by rising prices and strong retail interest. None have traded below NAV for extended periods. However, this business model relies on the premium’s persistence.
As Matthew Sigel, an analyst at VanEck, noted: “If the share price falls to NAV, equity dilution is no longer strategic—it becomes value extraction.” This statement highlights a core vulnerability. ATM offerings, the capital engine for these firms, depend on the stock trading above NAV. When the premium exists, share issuance increases Bitcoin per share; if the premium disappears, dilution reduces shareholders’ Bitcoin exposure.
The entire model is built on a self-reinforcing cycle:
- Share premium enables fundraising.
- Fundraising buys more Bitcoin.
- Bitcoin accumulation strengthens the corporate narrative.
- The narrative helps maintain the share premium.
If the premium declines, the cycle breaks: funding becomes expensive, Bitcoin accumulation slows, and the narrative weakens. While these companies currently benefit from market access and investor enthusiasm, their sustainability will depend on financial discipline, transparency, and a focus on increasing Bitcoin per share—not just total holdings.
Frequently Asked Questions
What does “premium to NAV” mean for Bitcoin companies?
It means the stock price is higher than the value of Bitcoin held per share. For example, if a company’s Bitcoin NAV is $10 per share but the stock trades at $17.50, the premium is 75%. This reflects market expectations of future Bitcoin accumulation and strategic advantages.
Why do investors buy MSTR stock instead of Bitcoin itself?
Investors are not only gaining exposure to Bitcoin but also to the company’s ability to raise capital and buy more Bitcoin over time. This can amplify returns during bull markets due to leverage and continuous accumulation.
How do Bitcoin-reserve companies increase their holdings?
They use capital market tools like stock offerings (e.g., ATM programs) and debt issuances. These strategies allow them to fund additional Bitcoin purchases without relying solely on operational cash flow.
What is Bitcoin yield?
Bitcoin yield measures the growth in Bitcoin holdings per share. A high yield indicates that the company is effectively using capital raises to increase each shareholder’s Bitcoin exposure over time.
Are these companies’ Bitcoin holdings auditable?
Some, like Metaplanet, provide on-chain proof-of-reserves for transparency. Others, including MicroStrategy, have not adopted public verification, citing potential security concerns—though this remains debated.
What risks are involved in investing in these stocks?
The main risk is premium contraction. If the share price falls to NAV, the capital-raising advantage disappears, and dilution may reduce Bitcoin exposure per share. This model is highly dependent on sustained market optimism.
Conclusion
Wall Street’s appetite for Bitcoin-reserve stocks like MSTR, despite steep premiums, is not irrational. These companies offer leveraged exposure to Bitcoin through continuous capital-raising and accumulation strategies. However, this approach depends on maintaining investor confidence and share price premiums. Transparency, disciplined capital allocation, and a focus per-share metrics will be essential as the market evolves.
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