The New Trend of Publicly Listed Companies: Analysis of the Crypto Assets Reserve Economic Model

Introduction

By mid-2025, an increasing number of publicly listed companies are beginning to incorporate Crypto Assets (, especially Bitcoin ), into their asset allocation. Data shows that in June 2025 alone, 26 new companies added Bitcoin to their balance sheets, bringing the total number of companies holding BTC globally to around 250.

These companies span multiple industries and regions. Many companies view the limited supply of Bitcoin as a tool against inflation and emphasize its low correlation with traditional financial assets. This strategy is quietly becoming mainstream: as of May 2025, 64 SEC-registered companies collectively hold approximately 688,000 BTC, accounting for about 3-4% of the total Bitcoin supply. Analysts estimate that more than 100-200 companies worldwide have incorporated crypto assets into their financial statements.

Model of Crypto Assets Reserves

When publicly traded companies allocate part of their assets to Crypto Assets, a core question arises: how do they finance the purchase of these assets? Unlike traditional financial institutions, most companies that adopt a crypto treasury strategy do not rely on cash-rich core businesses to support them. Next, we will analyze MicroStrategy(MSTR) as a primary case study, as most other companies are actually replicating its model.

main business cash flow

Although theoretically the “healthiest” and least dilutive way is to purchase Crypto Assets using the free cash flow generated by the company’s core business, in reality, this approach is nearly infeasible. Most companies lack sufficient stable and large-scale cash flow, making it impossible to accumulate a significant reserve of BTC, ETH, or SOL without relying on external financing.

Taking MicroStrategy as an example: the company was founded in 1989 and was originally a software enterprise focused on business intelligence. Its main products include HyperIntelligence, AI analytics dashboards, and other products, but these products still only generate limited revenue to this day. In fact, MSTR’s annual operating cash flow is negative, far from the scale of its hundreds of billions of dollars invested in Bitcoin. Therefore, it is evident that MicroStrategy’s Crypto Assets treasury strategy has not been based on internal profitability from the very beginning, but rather relies on external capital operations.

A similar situation also occurred at SharpLink Gaming(SBET). The company transformed into an Ethereum treasury vehicle in 2025, purchasing over 280,706 ETH(, amounting to approximately 840 million USD). Clearly, it could not rely on the revenue from its B2B gaming business to achieve this operation. SBET’s capital formation strategy mainly relies on PIPE financing and direct stock issuance, rather than operational income.

Capital Market Financing

Among publicly traded companies adopting encryption vault strategies, the most common and scalable method is through public market financing, raising funds by issuing stocks or bonds, and using the proceeds to purchase Bitcoin and other Crypto Assets. This model allows companies to build large-scale encryption vaults without using retained earnings, fully leveraging financial engineering methods from traditional capital markets.

Issuing Stocks: Traditional Dilutive Financing Case

In most cases, issuing new shares comes with costs. When a company raises funds by issuing additional shares, two things usually happen:

1. Ownership is diluted: The shareholding ratio of existing shareholders in the company decreases.
2. Earnings per share ( EPS ) decreased: The increase in total share capital led to a decrease in EPS while net profit remained unchanged.

These effects usually lead to a decline in stock prices, primarily for two reasons:

• Valuation logic: If the price-to-earnings ratio (P/E) remains unchanged, and EPS declines, the stock price will also fall.
• Market Psychology: Investors often interpret financing as a sign that a company lacks funds or is in trouble, especially when the raised funds are used for unproven growth plans. Additionally, the influx of new stocks into the market creates supply pressure that can also lower market prices.

MicroStrategy’s anti-dilution equity model

MicroStrategy(MSTR) is a typical counterexample to the traditional narrative of “equity dilution = shareholder loss.” Since 2020, MSTR has been actively using equity financing to purchase Bitcoin, with its total outstanding shares increasing from less than 100 million to over 224 million by the end of 2024.

Despite the dilution of equity, MSTR often outperforms Bitcoin itself. Why? Because MicroStrategy has long been in a state of “market value greater than its held Bitcoin net worth,” known as mNAV > 1.

Understanding Premium: What is mNAV?

mNAV = MSTR Market Cap / ( MSTR held BTC Market Cap - Total Liabilities )

• When mNAV > 1, the market values MSTR higher than the fair market value of the Bitcoin it holds.

In other words, when investors gain exposure to Bitcoin through MSTR, the price paid per unit is higher than the cost of directly purchasing BTC. This premium reflects the market’s confidence in Michael Saylor’s capital strategy and may also represent the market’s belief that MSTR offers leveraged, actively managed BTC exposure.

Support of traditional financial logic

Although mNAV is a Crypto Assets native valuation indicator, the concept of “trading price being higher than the underlying asset value” has long been prevalent in traditional finance.

The reasons why the company often trades at a price higher than its book value or net assets are mainly as follows:

Discounted Cash Flow ( DCF ) Valuation Method

Investors are concerned with the present value of the company’s future cash flows, not just the assets it currently holds.

This valuation method often leads to the company’s trading price being much higher than its book value, especially in the following situations:

• Revenue and profit margin expectations to grow
• The company has pricing power or technical/commercial moats.

Example: Microsoft’s valuation is not based on its cash or hardware assets, but on its future stable subscription software cash flow.

Profit and Income Multiple Valuation Method ( EBITDA )

In many high-growth industries, companies typically use P/E( price-to-earnings ratio) or revenue multiples for valuation:

• High-growth software companies may trade at multiples of 20-30 times EBITDA;
• Early companies may trade at 50 times revenue or higher even without profits.

Example: Amazon’s price-to-earnings ratio reached as high as 1078 times in 2013. Despite slim profits, investors still bet on its future dominance in the e-commerce and AWS sectors.

MicroStrategy has advantages that Bitcoin itself does not have: a corporate shell that can access traditional financing channels. As a publicly traded company in the United States, it can issue stocks, bonds, and even preferred shares to raise cash, and it has indeed done so with remarkable results.

Michael Saylor cleverly takes advantage of this system: he has raised billions of dollars by issuing zero-interest convertible bonds and the recently launched innovative preferred stock products, and has invested all of this capital into Bitcoin.

Investors recognize that MicroStrategy can leverage “other people’s money” to make large-scale purchases of Bitcoin, and this opportunity is not easily replicated by individual investors. The premium of MicroStrategy “is not related to short-term NAV arbitrage,” but rather comes from the market’s high trust in its capital acquisition and allocation capabilities.

mNAV > 1 How to achieve anti-dilution

When MicroStrategy’s trading price is higher than its net asset value of held Bitcoin (, i.e., mNAV > 1), the company can:

1. Issue new shares at a premium price
2. Use the raised funds to purchase more Bitcoin (BTC)
3. Increase total BTC holdings
4. Promote the synchronization rise of NAV and Enterprise Value (.

Even with an increase in circulating shares, the amount of BTC held per share )BTC/share( may remain stable or even increase, making the issuance of new shares a anti-dilution operation.

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)# What happens if mNAV < 1?

When mNAV < 1, it means that each dollar of MSTR stock represents a BTC market value exceeding one dollar ###, at least on paper (.

From the perspective of traditional finance, MSTR is trading at a discount, that is, below its net asset value ) NAV (. This poses challenges in capital allocation. If the company finances with stock in this situation to buy BTC, from the shareholders’ perspective, it is actually buying BTC at a high price, thus:

• Diluted BTC/share ) per share BTC holding (
• and reduce the value of existing shareholders

When MicroStrategy faces the situation of mNAV < 1, it will be unable to maintain the “issue new shares → purchase BTC → increase BTC/share” flywheel effect.

So what other options are there at this time?

)# Repurchase stocks instead of continuing to buy BTC

When mNAV < 1, repurchasing MSTR stocks is a value-enhancing behavior, for reasons including:

• You are repurchasing stocks at a price lower than their intrinsic value in BTC.
• As the number of circulating shares decreases, BTC/share will rise.

Saylor has clearly stated: if mNAV is below 1, the best strategy is to repurchase shares instead of continuing to buy BTC.

发行优先股###Preferred Stock(

Preferred stock is a type of hybrid security that sits between debt and common stock in a company’s capital structure. It typically provides fixed dividends, has no voting rights, and has priority over common stock in profit distribution and liquidation. Unlike debt, preferred stock does not require repayment of principal; unlike common stock, it can provide more predictable income.

MicroStrategy has issued three classes of preferred shares: STRK, STRF, and STRC.

STRF is the most direct tool: it is an immutable perpetual preferred stock that pays a fixed cash dividend of 10% annually on a par value of $100. It has no equity conversion option, nor does it participate in the stock appreciation of MSTR, only providing income.

The market price of STRF will fluctuate around the following logic:

• If MicroStrategy needs financing, it will issue more STRF, thereby increasing supply and causing the price to decline;
• If the market’s demand for returns surges ) like during periods of low interest rates (, the price of STRF will rise, thereby reducing the effective yield;
• This forms a price self-adjusting mechanism, where the price range is usually narrow, for example $80-$100, driven by yield demand and supply and demand.

Example: If the market demands a 15% return, the STRF price may drop to $66.67; if the market accepts 5%, it may rise to $200.

Since STRF is an non-convertible and essentially non-redeemable instrument ) unless triggered by tax or capital conditions (, its behavior is similar to a perpetual bond, allowing MicroStrategy to repeatedly “buy the dip” in BTC without the need for refinancing.

STRK is similar to STRF, with an annual dividend of 8%, but it has a key feature: it can be converted into common stock at a 10:1 ratio when the MSTR stock price exceeds $1,000, which is equivalent to embedding a deep out-of-the-money call option ), providing holders with a long-term upside opportunity.

STRK is highly attractive to both companies and investors for several reasons:

Asymmetric Upside Opportunities for MSTR Shareholders:

• The price per share of STRK is about $85, and 10 shares can raise $850;
• If it converts to 1 share of MSTR in the future, it means the company is buying BTC at a cost of $850 currently, but it will only be diluted if the MSTR stock price rises above $1,000;
• Therefore, during the MSTR < $1,000 period, it is non-dilutive, reflecting the appreciation brought about by the previous BTC accumulation even after conversion.

Stable Yield Structure:

• STRK pays a dividend of $2 every quarter, annualized $8;
• If the price drops to $50, the yield will rise to 16%, attracting buying support for the price;