The Hidden Grift of Bitcoin Treasury Companies
There’s a growing class of companies pitching themselves as “Bitcoin treasuries.” The pitch sounds simple: buy stock in the company, and you indirectly own Bitcoin with the added bonus of potential “yield.” On the surface, it feels like a way to get exposure to Bitcoin while maybe collecting something extra. But if you look under the hood, the math doesn’t add up.
The Setup: How the Illusion Works
Imagine a company with no profits, only expenses. They hold $1 of Bitcoin and issue one share of stock priced at $2. That stock trades at a premium to the underlying Bitcoin value because of branding, marketing, or just hype.
Now the company sells another share for $2, buys $2 more Bitcoin, and now has $3 worth of Bitcoin in the treasury. With two shares outstanding, each shareholder indirectly has a claim on $1.50 of Bitcoin. The first investor is “up” 50 cents, and the second is “down” 50 cents.
The company spins this as “Bitcoin yield” — as if they’ve magically increased shareholder value. But in reality, all that happened is one investor subsidized another. That’s not yield; it’s redistribution.
Why It’s Unsustainable
The grift only works as long as new investors are willing to pay more than $1 for $1 worth of Bitcoin. Once enthusiasm fades or the pool of “greater fools” dries up, the illusion collapses.
• Scaling Problem: As the company grows, it needs exponentially more fresh capital to deliver the same “yield” effect. You can’t onboard infinite new investors at a premium.
• Operational Drag: Unlike simply holding Bitcoin, these companies have overhead — executives, offices, compliance costs. Every dollar spent on operations is a dollar not going into Bitcoin. That’s a guaranteed bleed on shareholder value.
• Market Reality: Eventually, markets notice. If each share only represents $1 of Bitcoin, why keep paying $2 unless you believe in the grift itself?
Why Just Holding Bitcoin Wins
The beauty of Bitcoin is that it doesn’t need financial engineering. It doesn’t need a marketing team, an executive suite, or a slick yield narrative. It just needs time and security. Every sat you hold is fully yours, unencumbered by someone else’s expenses or need for fresh capital.
Over time, Bitcoin’s supply schedule ensures scarcity. The same can’t be said for companies minting endless new shares to fund “yield” illusions. Their model only scales until the next wave of investors stops showing up.
The Bottom Line
Bitcoin treasury companies selling “yield” are really just running a disguised transfer scheme: new money props up old money. That’s the textbook definition of a Ponzi-like dynamic.
It might work in the short run, but it will always fail the long run — no matter how high Bitcoin goes — because you eventually run out of people willing to pay $2 for $1.
If you want yield, build a business. If you want Bitcoin exposure, just buy Bitcoin. Everything else is a distraction at best, a grift at worst.