How to define the goals of a Bitcoin Treasury company

Author: Andrej Antonijevic, Translated by Shaw Jinse Finance

Abstract

1. Bitcoin is the only bearer digital asset with a trustworthy and immutable supply cap enforced by a decentralized consensus mechanism. Its adoption is still in the early stages of the global transition away from fiat currencies.

2. The goals of Bitcoin Treasury Reserve companies are threefold: to accelerate this transition by mobilizing capital at scale; to accumulate Bitcoin within their corporate structures; and ultimately to build future financial institutions and services on this basis.

3. In the short term, these companies can generate Bitcoin income; in the long term, they can develop into full-reserve Bitcoin-based institutions capable of providing capital and services to society on a global scale. Introduction: Bitcoin is the only digital bearer asset with a credible and immutable supply cap enforced by a decentralized consensus mechanism. Its supply is capped at 21 million, and its store of value functionality depends on societal acceptance. Society is in the process of adopting Bitcoin. The early stages were defined by pioneers who recognized the concept and began accumulating Bitcoin. In the current stage, Bitcoin adoption is much broader: millions of individuals hold Bitcoin, Bitcoin exchange-traded funds (ETFs) exist, brokers and custodians offer access, and Bitcoin Treasury Reserve has entered the field. However, the proportion of the global population who accepts and participates in Bitcoin remains relatively low. This means we are in the early stages of Bitcoin's second phase of adoption. The transition to digital currency primarily relies on one activity: exchanging fiat currency for Bitcoin. Individuals call this "buying Bitcoin," but it's essentially exchanging depreciating currency for stable currency. If left to individuals alone, this process would take years. While it will inevitably develop, especially amidst the continued devaluation of fiat currencies, it will proceed at a relatively slow pace. Bitcoin Treasury Reserve companies are designed precisely for this purpose, serving as engines for mobilizing capital at scale to enhance and facilitate this adoption phase. The Purpose of Bitcoin Treasury Companies The purpose of Bitcoin Treasury Reserve companies is threefold and progressive. First, they exist to accelerate the transition from fiat to Bitcoin by mobilizing capital at scale to purchase Bitcoin. Second, through this process, they accumulate Bitcoin within their corporate structures, creating a collective treasury that could not be built at the same speed or scale by an individual. Third, this accumulated Bitcoin reserve will ultimately enable the development of new financial capabilities and services within their corporate structures. In the short term, treasury companies are focused on achieving the first and second goals: mobilizing capital to accelerate the transition and, in the process, building an enterprise-level Bitcoin reserve. In the long term, once such a reserve is established, the third goal becomes possible: using it as the foundation for future business models and social services. Short-Term: Bitcoin Gains Bitcoin Treasury Reserve's short-term goal is Bitcoin gains. Currently, Bitcoin gains manifest as an increase in the number of Bitcoins per share. This gain drives large-scale fiat capital mobilization and, therefore, represents the primary form of capital market arbitrage between fiat and Bitcoin. This arbitrage isn't the narrow, risk-free arbitrage of textbooks, but rather arbitrage in a broader sense, extracting value from the asymmetry between the two realms. All such arbitrage opportunities, and the resulting Bitcoin gains, stem from the asymmetry of flows between two fundamentally different realms. Fiat instruments are priced and valued based on fiat expectations, while Bitcoin operates on completely different assumptions of scarcity and value. By mobilizing funds in the fiat realm and converting them into Bitcoin through corporate structures, Treasury Reserve bridges these two realms. The gap between the two—the difference in expectations and pricing—is the root cause of arbitrage. However, Bitcoin yield is not a single concept. While currently measured in terms of the increase in the number of Bitcoins per share, innovation may allow it to assume other, yet-to-be-designed and standardized, forms. What matters is not the unit of account or the specific calculation of yield, but the underlying economic reality: the large-scale execution of fiat-to-Bitcoin fund transfers inevitably generates yield. ETFs may also hold Bitcoin, but they simply exchange fiat for Bitcoin on a one-to-one basis. They do not exploit arbitrage opportunities and do not generate any additional yield beyond passive investment. In contrast, treasury companies take an active approach: they mobilize capital markets to accelerate accumulation, generate returns from arbitrage, and build a Bitcoin reserve with inherent value. This reserve is not static. Over the long term, as treasury companies develop into institutions that provide services based on it, it will become the foundation for future uses. Whether expressed in terms of an increase in the number of Bitcoins per share or some other form of financial yield, Bitcoin yield represents the same principle: it incentivizes investors to accumulate Bitcoin collectively within a corporate structure, rather than through individual incentives. The window of opportunity is limited. As adoption grows and asymmetries narrow, these transitional advantages will diminish. This is why the current phase is so critical. The Long Term: Building Future Institutions In the long term, once transitional arbitrage is resolved and significant Bitcoin reserves have accumulated, Bitcoin Treasury companies can evolve into the Bitcoin-based financial institutions of the future. These institutions could play a variety of roles in society: acting as lenders, providing collateral, or acting as insurance companies. With Bitcoin as a reserve, they could underwrite risks, provide insurance, support entrepreneurial activity by businesses and individuals, and provide capital at scale across borders that is non-state-involved, verifiable, and transparent on-chain. Such institutions would embody the principles of full-reserve finance. They would be funded by corporate equity, not public debt. Financial services will be provided with verifiable collateral, without engaging in the money creation inherent in fractional reserve banking. In a world where Bitcoin has become the primary store of value, this model creates a sustainable institution based on a robust design. Conclusion: Bitcoin Treasury Reserve companies are the capital market engine driving the transition from fiat to Bitcoin. In the short term, they mobilize capital to accelerate Bitcoin adoption and build a system of corporate reserves on Bitcoin, thereby benefiting from the asymmetry between the two sectors. In the long term, these Bitcoin Treasury companies will become the foundation of full-reserve institutions backed by Bitcoin, capable of providing funds and services globally.