What is the structure of the Elastic Bitcoin Treasury Company (RBTC)?

Author: Andrej Antonijevic, Source: Bitcoin Treasury, Translated by: Shaw Golden Finance

Summary

This article introduces the "Resilient Bitcoin Treasury Company" (RBTC), which is a business model designed to accumulate Bitcoin and minimize the risk of permanent capital loss. RBTC is based on the risk-efficiency ladder of financial instruments and the risk-return spectrum of corporate strategies, with equity as the dominant focus, offering flexibility and the option to provide regular returns. Compared to similar products, it represents a low-risk anchor: a stable, innovative long-term Bitcoin accumulation and yield generation tool.

Introduction

Most Bitcoin treasury reserve companies today aim to accumulate as much Bitcoin as possible and create Bitcoin returns through financial instruments that can generate appreciation. This model should be combined with corporate resilience. A Bitcoin treasury reserve company must be able to survive in an environment where Bitcoin prices are falling, responsibly manage its financing portfolio, and if it wants to expand its business, it must provide reliable income throughout the process.

This article introduces the risk efficiency ladder of financial instruments used to generate Bitcoin returns, the risk-return spectrum of Bitcoin treasury company corporate strategies, and proposes the concept of an elastic Bitcoin treasury company (RBTC): a structure aimed at accumulating Bitcoin in a value-added manner while minimizing the risk of permanent capital loss and opening participation to a broader investor base.

The Risk Efficiency Ladder of Financial Instruments

We first introduce the risk efficiency ladder of the four main financial instruments used by Bitcoin treasury reserve companies to purchase Bitcoin: common stock, convertible bonds, term debt, and perpetual preferred stock.

The x-axis represents issuance efficiency, measuring the potential for returns and the generation of Bitcoin profits. Efficiency is defined as the percentage of newly acquired Bitcoins that belong to existing shareholders after being diluted by new financing.

In a previous article, we introduced the formula for efficiency:

Efficiency = BTC Yield Rate (%) ÷ BTC Purchase Volume Growth (%)

Efficiency measures the increase in earnings per share of Bitcoin when a company raises funds to purchase more Bitcoin.

We have also listed the efficiency estimated by tool category, summarized as follows:

The y-axis displays the independent risk of each tool. Risk is defined as the risk of permanent capital loss under long-term adverse conditions. In other words, if the price of Bitcoin remains low for an extended period, or if stocks trade at a discount (greater than the acceptable threshold defined in previous articles) for a long time, how long will it take for the company to go bankrupt or exhaust its liquidity? The longer a company survives under these conditions, the lower the risk, and vice versa.

Example:

• In a scenario that only involves equity models, the time required for bankruptcy is relatively long. Since there is no need to repay interest or principal, a company may struggle as Bitcoin prices weaken, but it will not be forced into bankruptcy. Of course, operating costs are still very important, as they determine how long the company can continue to operate.
• In contrast, periodic debt must pay a relatively high coupon and ultimately repay the principal. If the price of Bitcoin falls at maturity, the debt must be repaid by issuing stock, and if the stock price is below the acceptable threshold for that instrument (as defined earlier), this will lead to permanent capital loss.

The figure below shows the risk efficiency ladder of four tools:

The above analysis is based on the perspective of a single independent tool. Since Bitcoin treasury reserve companies typically utilize various financing tools, we expand this framework to the corporate-level strategic risk-return spectrum. Before that, we introduce a company design dedicated to maintaining resilience under market conditions: the Resilient Bitcoin Treasury Company (RBTC).

Resilient Bitcoin Treasury Company (RBTC)

Bitcoin itself is a volatile asset, and high drawdowns are not uncommon. Most Bitcoin treasury reserve companies acknowledge this reality and have built sufficiently long operational structures to benefit from the long-term expected performance of Bitcoin. However, the ways in which they achieve this vary.

Elastic Bitcoin Treasury Company (RBTC) aims to minimize the risk of permanent capital loss. Its main features are as follows:

• Equity Financing. RBTC does not use fixed-term debt, convertible bonds, or perpetual preferred stock. Since there are no coupons or debt repayment at maturity, there is no external debt that could lead to bankruptcy. Operating costs still exist, but these costs are manageable and applicable to any structure. This makes RBTC the company form with the lowest risk in holding Bitcoin.
• Bilateral Capital Strategy: Willing to sell Bitcoin to offset discounts. As mentioned earlier, rigid statements like "never sell Bitcoin" can pose risks. RBTC follows a two-way principle: when its stock trading price is higher than the net asset value, it issues shares to purchase Bitcoin; when its stock trading price is lower than the net asset value, it is willing to sell Bitcoin and use the proceeds to buy back shares. Both scenarios will lead to an increase in the price per share of Bitcoin, and the Bitcoin yield is two-way. Crucially, this mechanism is independent of the Bitcoin price. Whether the Bitcoin price is sluggish (selling Bitcoin at a low to fund buybacks) or soaring (issuing at a premium to purchase more Bitcoin), the premium/discount relationship itself will drive appreciation.
• Minimum risk of permanent loss. Without external financing obligations, RBTC can withstand the test of a long-term bear market. Its pros and cons are evident: compared to debt-based strategies, its efficiency and return potential are lower, but the risk of permanent capital loss or total bankruptcy is significantly reduced.
• Focus on Sustainable Accumulation. RBTC recognizes that the true advantage lies in the long-term holding of accumulated Bitcoin assets. High leverage and high return strategies may seem attractive, but their results are often twofold: either returns are amplified, or during unfavorable times, they force investors to repay at a substantial discount or dilute assets, leading to permanent capital loss. RBTC is willing to sacrifice some efficiency in returns to maximize the probability of success, thereby maximizing participation in the long-term appreciation of Bitcoin.

Increase Regular Income Tier

The stock market distinguishes between growth stocks and income stocks. So far, the Bitcoin treasury reserve company has only played a growth role. However, increasing rule-based income policies can reduce the risk of the investor experience and broaden the investor base.

Traditional Bitcoin reserve companies typically rely on external investors of convertible bonds, perpetual bonds, or term debt, paying them interest to obtain financing. RBTC internalizes this logic: it does not need to pay interest to external investors, but instead returns a portion of Bitcoin earnings directly to shareholders.

The dividend structure consists of three elements:

• First, conduct a composite runway: No fees are paid for the first 4 years.
• Distribution Rhythm: A portion of BTC profits is distributed every 2 years (for example, 20%).
• Dividend Forms: Legal tender dividends (selling BTC, converting to legal tender on the record date, and distributing in cash) or stock dividends (issuing new shares equivalent to the distribution value, diluting part of the BTC earnings, but providing income without BTC sales).

This policy is closely related to investors. Currently, investors purchasing preferred shares of Bitcoin treasury companies may accept a coupon rate of 7%-8%. They may be more inclined towards a structure that allows them to gain a 20% share of Bitcoin returns, participate in the long-term price increase of Bitcoin, and achieve this through a low-risk pure equity investment tool.

Some may think that for Bitcoin treasury companies that currently do not pay dividends, investors can "create" returns by selling part of their equity. However, this is not equivalent: doing so always exposes investors to the risk of selling at a price above or below the net asset value. In contrast, in the RBTC model, dividends are realized directly at the net asset value on the record date.

Expand investor access

RBTC may also expand the investor base of Bitcoin treasury reserve companies. By offering dividends on top of stock exposure, it could attract the following groups:

• Pension funds and insurance companies are looking for reliable sources of income.
• Stock investors seeking returns cannot acquire Bitcoin through existing non-yielding government bonds.
• Current debt investors (perpetual bonds, fixed-term debt, or convertible bonds) may prefer low-risk, equity-based structures with periodic returns.

RBTC is an innovative model built on sound capital management principles. It combines pure equity financing, a dual capital strategy, and an optional yield layer to provide investors with a lower-risk, more flexible Bitcoin investment tool. Given its concept of reducing bankruptcy risk and the ability to achieve net asset value through dividends, RBTC can achieve a premium; even if it does not yield a higher premium, it can at least obtain a more stable net asset value premium over time. Thus, it provides a safer way to hold Bitcoin while also offering a more stable platform for generating Bitcoin returns.

Risk-Return Spectrum of Corporate Strategy

The analysis of financial instruments and the design of RBTC together form the risk-return profile of Bitcoin Treasury Company. The financing mix and capital discipline determine the company's position on this profile: the higher the external debt and constraints, the greater the risk of permanent capital loss; the clearer and more flexible the equity base, the lower the risk.

We illustrate this by comparing four models of Bitcoin treasury companies:

• Elastic Bitcoin Treasury Company (RBTC) adopts an equity-led, anti-fragile model with an optional yield layer. Financing relies entirely on equity issued at a premium, without involving convertible bonds, term debts, or collateralized pledges. With no coupon or maturity date, there is no external debt that could trigger bankruptcy, and the operational costs are the only fixed liabilities. The return potential is moderate, driven by issuance efficiency and premium discipline, while the yield options enhance investor appeal. Risk: Low, Return: Moderate.
• Metaplanet positions itself as a "Bitcoin treasure trove specialty company" in Japan, pursuing high growth. Its financing portfolio includes issuing stock and permanently preferred stock approved by shareholders, and it plans to use Bitcoin as collateral for bank financing in future acquisitions. This introduces lender credit risk and ongoing distribution obligations, but also creates more financing channels. Risk: Medium, Return: Medium-High.
• Strategy (formerly known as MicroStrategy) represents a financial engineering model that achieves scalability through complex issuances. It relies on zero-coupon convertible bonds, multiple perpetual preferred stock programs, and ongoing common stock ATM issuances. The layered debt of convertible bonds and preferred stock still increases refinancing and equity dilution risks. Risk: Medium-High, Return: High.
• MARA (Marathon Digital Holdings) initially started as a mining company and has now evolved into a hybrid miner-treasury reserve company. The company's growth and Bitcoin accumulation are primarily financed through the issuance of large-scale convertible bonds (including the recent issuance of zero-coupon bonds) and the cyclical leverage of its mining operations. This debt-driven model exposes the company to risks associated with interest payments, maturity pressures, and operational volatility. Risk: High, Return: High (Cyclical).

The chart below shows the corporate strategic risk-return spectrum of Bitcoin treasury reserve companies:

This diagram clearly indicates that corporate design is not merely about pursuing the highest Bitcoin returns. The distinction between resilience and vulnerability lies in the financing portfolio and the willingness to maintain flexibility. RBTC represents a low-risk anchor point on this chart, making it a good choice for investors who value stability over leveraged-driven outcomes.

Conclusion

We introduced the risk efficiency ladder of financial instruments, the risk-return spectrum of corporate strategies, and the design of the resilient Bitcoin treasury company (RBTC). Overall, these perspectives suggest that the structure of a Bitcoin treasury reserve company can not only achieve growth but also possess resilience. RBTC provides a stable and innovative model for long-term Bitcoin accumulation and yield generation.