The High Premium Phenomenon of Bitcoin Reserve Companies: Leverage Effect and Capital Operations

One of the most discussed topics in the public market in 2025 is companies that incorporate Bitcoin into their balance sheets. Although investors have various ways to gain direct exposure to Bitcoin, such as ETFs, spot, wrapped Bitcoin, and futures contracts, many still choose to purchase shares of Bitcoin reserve companies to gain exposure to Bitcoin risk, even though these stocks are trading at a significant premium relative to Bitcoin's net asset value ( NAV ).

This premium refers to the difference between a company's stock price and the value of its Bitcoin holdings per share. For example, if a company holds Bitcoin worth $100 million and has 10 million shares outstanding, the Bitcoin NAV per share would be $10. If the stock price is $17.5, the premium rate would be 75%. In this case, mNAV (multiple of net asset value) reflects how many times the stock price is compared to the Bitcoin NAV, and the premium rate is the percentage of mNAV minus 1.

So, why can the valuations of these companies far exceed the Bitcoin assets they hold?

Leverage Effect and Capital Acquisition Ability

The main reason for the premium on the stock prices of Bitcoin reserve companies may be that they can leverage through the public capital markets. These companies can raise funds by issuing bonds and stocks to increase their holdings of Bitcoin. Essentially, they have become high-β proxy tools for Bitcoin, amplifying Bitcoin's sensitivity to market fluctuations.

The most commonly used and effective method in this strategy is the "Market Price Issuance" ( ATM ) stock issuance plan. This mechanism allows companies to gradually issue stocks at the current stock price, having minimal impact on the market. When the stock price has a premium compared to the Bitcoin NAV, the amount of Bitcoin that can be purchased for every 1 dollar raised through the ATM plan will exceed the dilution of Bitcoin holdings per share caused by the issuance. This creates a "per share Bitcoin holding appreciation cycle," continuously amplifying Bitcoin exposure.

A well-known company is a typical representative of this strategy. Since 2020, the company has raised billions of dollars through convertible bond issuance and secondary equity fundraising. As of June 30, 2025, the company holds 597,325 Bitcoins (approximately 2.84% of the circulating supply).

These types of financing instruments are only applicable to listed companies, allowing them to continuously increase their holdings of Bitcoin. This not only amplifies the exposure to Bitcoin but also creates a compounding narrative effect, where each successful fundraising and increase in Bitcoin holdings reinforces investors' confidence in this model. Therefore, investors buying shares of these companies are not only purchasing Bitcoin but also buying into "the ability to continuously increase Bitcoin holdings in the future."

Premium Range Analysis

The NAV premium rates of some Bitcoin reserve companies (as of June 30, 2025; assuming a Bitcoin price of $107,000) indicate that while the premium rate of a well-known company is relatively moderate (around 75%), some smaller companies have significantly higher premium rates, such as The Blockchain Group (217%) and Metaplanet (384%). These valuations suggest that market pricing reflects not only the growth potential of Bitcoin itself but also incorporates a comprehensive consideration of capital market accessibility, speculative space, and narrative value.

Bitcoin收益率：溢价背后的关键指标

One of the core indicators driving the premium on these companies' stocks is the "Bitcoin yield." This indicator measures the growth of each company's Bitcoin holdings per share over a specific period, reflecting its efficiency in increasing Bitcoin holdings through fundraising without causing excessive equity dilution. Among them, Metaplanet is known for its transparency, as its official website offers a real-time Bitcoin data dashboard that dynamically updates Bitcoin holdings, Bitcoin per share, and Bitcoin yield.

Metaplanet has made public its proof of reserves, while other peer companies have not widely adopted this practice. Some companies have not adopted any on-chain verification mechanisms to prove their Bitcoin holdings. There is a viewpoint that public proof of reserves may pose security risks, but this viewpoint is controversial, as on-chain proof of reserves only requires the public key or address to be disclosed, rather than the private key or signature data. Since the security model of Bitcoin is based on the principle of "public keys can be safely shared", disclosing wallet addresses does not jeopardize asset security. On-chain proof of reserves provides investors with a direct way to verify the authenticity of the company's Bitcoin holdings.

The Potential Impact of Price Premium Disappearance

The high valuation of Bitcoin reserve companies still exists in a bull market environment where Bitcoin prices are rising and retail enthusiasm is high. No Bitcoin reserve company's stock price has been below NAV for a long time. The premise of this business model is the continuous existence of a premium. When the stock price falls to NAV, equity dilution will no longer be strategically significant but will turn into value extraction. This points directly to the core vulnerability of the model, as ATM stock issuance plans (the capital engine of these companies) essentially rely on stock price premiums.

This model relies on a self-reinforcing cycle: the stock price premium supports fundraising capability, fundraising is used to increase Bitcoin holdings, and the increase in Bitcoin holdings strengthens the company narrative, which in turn maintains the stock price premium. If the premium disappears, the cycle will be broken: financing costs will rise, the increase in Bitcoin holdings will slow down, and the narrative value will weaken.

Currently, Bitcoin reserve companies still enjoy advantages in capital market access and investor enthusiasm, but their future development will depend on financial discipline, transparency, and the ability to "increase the per-share Bitcoin holdings" (rather than simply accumulating total Bitcoin). The "option value" that gives these stocks attractiveness in a bull market may quickly turn into a burden in a bear market.