'%3e%3crect%20x='109.185'%20y='253.397'%20width='350.859'%20height='857.656'%20fill='white'/%3e%3cpath%20d='M274.77%20708.572H233.194V888.205H286.632C302.651%20888.205%20314.635%20883.711%20322.461%20875.088C330.287%20866.465%20334.322%20851.404%20334.322%20830.149V779.138C334.322%20752.539%20329.797%20734.2%20320.382%20723.997C310.966%20713.795%20295.681%20708.451%20274.77%20708.451V708.572Z'%20fill='%23FF5C00'/%3e%3cpath%20d='M310.966%20610.558C320.015%20601.206%20324.539%20585.295%20324.539%20563.19V530.518C324.539%20490.559%20308.887%20470.519%20277.705%20470.033H232.949V624.768H269.512C287.977%20624.768%20302.039%20619.91%20311.088%20610.436L310.966%20610.558Z'%20fill='%23FF5C00'/%3e%3cpath%20d='M277.582%200C124.362%200%200%20123.399%200%20275.704V1069.3C0%201221.48%20124.239%201345%20277.582%201345C430.803%201345%20555.165%201221.6%20555.165%201069.3V275.704C555.165%20123.52%20430.926%200%20277.582%200ZM426.523%20833.064C426.523%20878.367%20414.539%20912.739%20390.817%20936.423C375.898%20951.241%20356.7%20961.322%20333.221%20966.909V987.677C333.221%201002.5%20320.993%201014.64%20306.075%201014.64C291.156%201014.64%20278.805%201002.5%20278.805%20987.677V971.888H232.949V987.677C232.949%201002.5%20220.721%201014.64%20205.803%201014.64C190.884%201014.64%20178.655%201002.5%20178.655%20987.677V971.888H170.218C150.53%20971.888%20140.625%20962.05%20140.625%20942.496V415.743C140.625%20396.188%20150.53%20386.35%20170.218%20386.35H178.655V357.201C178.655%20342.383%20190.884%20330.238%20205.803%20330.238C220.721%20330.238%20232.949%20342.383%20232.949%20357.201V386.35H278.805V357.201C278.805%20342.383%20291.034%20330.238%20306.075%20330.238C321.115%20330.238%20333.221%20342.383%20333.221%20357.201V388.78C333.221%20389.994%20332.977%20391.087%20332.855%20392.18C354.499%20397.524%20371.863%20406.512%20384.703%20419.386C406.469%20441.491%20417.597%20475.377%20417.597%20521.045V544.364C417.597%20604.363%20397.42%20642.743%20357.556%20659.14V660.719C403.656%20676.265%20426.646%20717.074%20426.646%20782.782V833.064H426.523Z'%20fill='%23FF5C00'/%3e%3c/g%3e%3cdefs%3e%3cclipPath%20id='clip0_1_174'%3e%3crect%20width='555'%20height='1345'%20fill='white'/%3e%3c/clipPath%3e%3c/defs%3e%3c/svg%3e)
- The challenges of a company's treasury
- Bitcoin as a financial asset
- Bitcoin adopted by Wall Street
- Bitcoin in the company toolkit
- Is Bitcoin too expensive?
- The decision to allocate corporate treasury in Bitcoin
- Taxation of bitcoin held by businesses
The challenges of a company's treasury
The Treasury is the place where one puts precious things. A healthy company is properly capitalized, allowing it to cope with future uncertainty and plan its investments effectively. Nowadays, part of the excess treasury is placed in financial assets reputed to be highly “liquid,” such as bonds, term deposits, and so forth.
For a very long horizon, some companies use illiquid assets like real estate without realizing certain dangers:
- Illiquidity in the event of a crisis
- Ultimately, rather low returns once fees are deducted
- A return that does not outpace real inflation, that of the money supply (~7% per year, see below)
- The hidden risk is that real estate loses part of its “savings” function to the benefit of assets like Bitcoin. As a result, it could revert closer to its “use value”: providing shelter.
Let’s quickly review the environment in which businesses operate.
Real inflation: Much to the dismay of their mandate, central banks target a 2% annual inflation rate, which translates to a 40% loss in currency value over 20 years. Adding periods of more pronounced inflation, it becomes clear that companies cannot rely solely on currency to store the fruits of their labor. They must implement complex financial strategies, necessarily accompanied by a range of risks. These strategies are obviously inaccessible to very small businesses, which are already heavily occupied with their core activities.
Hidden inflation: In a debt-based, fractional-reserve monetary system supported by central banks, the overall money supply grows by about 7% per year on average (e.g., M1 in the Eurozone or the USA). This means your “share of the pie” is cut in half in just a few years—unless you have privileged access to the financial spigot and can continue to grow by leveraging and buying assets quickly at “old prices” before the newly created money drives them up. This is the Cantillon effect, which partly explains the transfer of wealth to the more affluent, while “capital” is wrongly blamed as the culprit (see our introduction on capital above).
Counterparty risks: The current financial system is risky, and you might not always have access to “your money.” Without invoking the image of a house of cards, it must be acknowledged that financial institutions privatize profits and socialize losses at the slightest crisis. In a system of “scriptural” money (money recorded in a ledger), the money in the bank is merely a “claim”; you do not truly own it, and the banks themselves “do not have it” (fractional reserves). This money is, in a way, truly magical. Some prestigious banks that once mocked Bitcoin, such as Credit Suisse, no longer exist today.
This lack of trust initiates a resurgence in “bearer” assets, such as gold (even though it is complicated to secure, transport, and divide), and, of course, Bitcoin, the newcomer.
Bitcoin as a financial asset
Bitcoin offers a radical alternative. It is a bearer asset, with no central issuer, is nearly impossible to seize, and benefits from network effects. “True” Bitcoin users choose to use it to store the fruits of their labor, as it is seen as a store of value resistant to both censorship and inflation. Thanks to the network effect, illustrated by Metcalfe’s Law, every new convinced user increases the network’s value; as the number of participants grows, Bitcoin’s utility rises exponentially. This model makes it a distinctive and promising form of capital, built on user adoption and trust.
Bitcoin is the most liquid asset in the world, operating 24/7 without interruption, unlike traditional financial markets that have closing hours and “circuit breakers.” This liquidity allows users to buy or sell bitcoins at any moment, whether in response to good news or bad (e.g., missile launches, wars, etc.).
Over the past decade, Bitcoin has exhibited an average annual growth rate of over 60%. This unique performance has allowed long-term holders to preserve their initial capital, unlike other instruments.
However, there are several key factors to keep in mind:
First, past performance does not guarantee future results. As long as Bitcoin remains secure and decentralized, one can reasonably expect an annual price appreciation of well above 20% for the next decade, making it a viable treasury tool.
Second, Bitcoin has so far experienced 4-year cycles, meaning that with a time horizon of more than 4 years, the bet has always been profitable. For those who see Bitcoin as an investment, a short-term horizon (<4 years) can be risky.
MICHAEL SAYLOR: "The best Bitcoin price signal is the 4-year simple moving average." See above chart.
Additionally, it is advisable to keep one’s exposure to Bitcoin proportional to one’s level of understanding. It’s also important not to rush or try to time the market perfectly.
Ultimately, Bitcoin is considered highly volatile. To be precise, its price as expressed in units of fiat money is. Part of this volatility is natural for a still-young asset, but it is also amplified by the presence of speculators who do not use it as a long-term store of value, instead seeking quick gains. Furthermore, leveraged trading (using borrowed funds to increase trading positions) accentuates both upward and downward price movements, preventing Bitcoin from following a straight upward path. This leads to more pronounced fluctuations, but over time, as the base of committed users grows, this volatility seems to be stabilizing. In summary, it’s impossible to have an asset as high-performing as Bitcoin without volatility, but you can certainly have far less performant assets with less volatility.
Bitcoin adopted by Wall Street
The adoption of Bitcoin by financial institutions further strengthens its position in the global market.
Recent statements by BlackRock highlight Bitcoin’s potential as a store-of-value asset and a portfolio diversification tool. The global institutional giant recently suggested that Bitcoin’s user growth is outpacing that of the internet or mobile phones, driven notably by demographic and generational shifts, as well as increasing distrust of traditional financial institutions (!). Due to its scarce, non-sovereign, and decentralized nature, some investors view Bitcoin as a safe haven option in times of fiscal and monetary instability, fear, or disruptive geopolitical events.
The Spot Bitcoin ETFs, launched in January 2024, have enjoyed phenomenal success—the most successful ETF launch in history—with nearly $20 billion in net inflows, from January to November. That’s about four times better than the next-best ETF launch, the Nasdaq-100 QQQ. These ETFs provide easier and more regulated access to Bitcoin, which has further legitimized it and attracted a significant influx of institutional capital.
Bitcoin ETFs lead by a wide margin in terms of institutional adoption, surpassing the top ten fastest-growing ETFs in both the number of institutions involved and the size of assets under management (AUM). The success of these Bitcoin ETFs underscores the growing demand for investment vehicles linked to digital assets, thereby solidifying Bitcoin’s place in the traditional financial landscape.
Bitcoin now plays in the “store of value” market. It represents only a drop in the bucket in terms of scale: just about $1,800 billion compared to gold’s $18,000 billion or real estate’s $500,000 billion. However, its roughly 0.1% market share gives it enormous room for growth, especially given that its competitors struggle to attract new users.
| Ticker | 1D Flow (M USD) | 1W Flow (M USD) | 1M Flow (M USD) | 3M Flow (M USD) | YTD Flow (M USD) |
| Sum | +457.19 | +1,507.95 | +2,888.01 | +3,672.29 | +20,262.94 |
| IBIT | +393.40 | +750.91 | +1,536.47 | +3,821.37 | +22,460.44 |
| FBTC | +14.81 | +372.40 | +627.16 | +458.71 | +10,266.69 |
| ARKB | +11.51 | +163.26 | +295.92 | -3.88 | +2,647.32 |
| BITB | +12.93 | +146.50 | +263.30 | +97.46 | +2,262.69 |
| HODL | +5.75 | +38.77 | +94.54 | +100.39 | +682.03 |
| BRRR | +1.92 | +4.72 | +17.76 | +20.54 | +540.19 |
| EZBC | +11.79 | +17.53 | +39.29 | +47.48 | +439.45 |
| BTC | .00 | -3.13 | +36.59 | +419.18 | +419.18 |
| BTCO | +6.43 | +19.25 | +47.30 | +56.41 | +394.82 |
| BTCW | .00 | +2.84 | +6.04 | +146.69 | +217.47 |
| YBIT | -1.34 | -10.26 | +5.06 | +13.81 | +76.30 |
| DEFI | .00 | .00 | .00 | -2.03 | -1.79 |
| GBTC | .00 | +5.16 | -81.42 | -1503.84 | -20,141.85 |
$20 billion in 10 months: Bitcoin ETFs achieved in less than a year what gold ETFs took 5 years to accomplish. Source: Fund investment flows in USD. Bloomberg Terminal, Bloomberg L.P., 2024.
Bitcoin in the company toolkit
The growing adoption of Bitcoin in the United States is also influencing mindsets elsewhere in the world, particularly among wealth management professionals who can no longer afford to exclude it from their range of tools — especially as traditional financial products are underperforming or facing challenging periods. Only traditional banks still seem able to afford ignoring it.
From a purely financial perspective, Bitcoin is recognized as a diversification asset. Not only is it uncorrelated with other asset classes, it also appears to thrive during periods of new liquidity injections—another such episode seems to be beginning with the lowering of interest rates by the ECB, the Fed, and China.
In summary, for the most common use case—investing excess treasury for at least a four-year window—Bitcoin fits perfectly. It’s worthwhile to combine this with a strategy of gradual entry, where you invest fixed amounts at regular intervals to smooth the entry or exit point.
Other use cases make Bitcoin a strategic treasury asset, for example:
- Being able to post collateral or liquidity 24/7
- Being able to transfer to another company’s treasury quickly, at any time
- Hedging against foreign currency exchange risk
- Paying a supplier who accepts it, particularly in emergencies
Is Bitcoin too expensive?
You do not have to buy exactly 1 Bitcoin, because Bitcoin is divisible into subunits called satoshis, named in honor of its anonymous creator. One bitcoin equals 100 million satoshis, allowing users to buy, sell, or trade even very small fractions of a bitcoin. In fact, within Bitcoin’s source code, all transactions are accounted for in satoshis, and the term “bitcoin” appears only in the “coinbase,” the special transaction miners create to receive their reward.
Moreover, the total of 21 million bitcoins—or 2.1 quadrillion satoshis—can be efficiently represented by a 64-bit integer. This means that despite a high price per whole bitcoin, it remains accessible to a wide range of investors thanks to its divisibility. You therefore do not need to purchase a whole bitcoin to participate in the network or invest in this digital asset.
Let’s remember that its relatively low total market capitalization, compared to other assets such as stocks, gold, or real estate, leaves its capacity for appreciation intact. With still very low penetration (around 1% of the global population), we are thought to be only at the beginning of its rise. This makes it the most asymmetric bet of our generation: there is now a very low probability it will drop to zero at this point, and a strong probability it will continue to gain ground.
The decision to allocate corporate treasury in Bitcoin
Your position within the company will significantly influence the decision-making process for investing in Bitcoin. If you are a majority owner, you are free to allocate excess treasury funds according to your own judgment. Conversely, if you are a partner or shareholder within a collective decision-making structure, you will need to go through joint deliberations, which can complicate matters.
In this second scenario, harmonizing different points of view becomes essential, as it largely depends on each stakeholder’s understanding of the Bitcoin asset. As the saying goes, “Bitcoin is everything people don’t know about computers combined with everything they don’t understand about money.” Even if one partner has made the effort to thoroughly understand Bitcoin, conveying this knowledge to others can be challenging. In such cases, it is advisable to bring in an external resource to avoid having the idea too closely identified with one individual, which could generate resistance.
Currently, the scenario of a majority owner making the decision is the most representative among companies that hold Bitcoin. Here are a few real examples :
- Independent professionals: Consultants, healthcare practitioners, or lawyers who invest part of their long-term treasury in Bitcoin. Generally, these professionals already hold savings or term deposit accounts with meager returns.
- Tech-sector executives: An executive who sold their company and invested part of the proceeds from their personal holding company into Bitcoin a few years ago. Today, they enjoy a comfortable financial situation and reinvest in new ventures.
- Owners of very small businesses: Entrepreneurs in services, agriculture, or craft industries who have understood Bitcoin’s potential and allocate a portion of their treasury to it. Their primary motivation lies in diversification and the freedom it provides
- Publicly traded companies like MicroStrategy have set a precedent by converting a significant portion of their corporate treasury into Bitcoin, demonstrating a global shift in corporate capital allocation strategies. By the fall of 2024, numerous other companies had followed suit, further legitimizing this trend.
Discover the updated list of companies holding the most bitcoins in treasury, as well as the amounts held, on the site: BitcoinTreasuries.net.
Taxation of bitcoin held by businesses
For businesses that are not structured as separate legal entities—such as sole proprietorships or other non-incorporated entities—the taxation of Bitcoin transactions often mirrors the treatment applied to individuals. In many cases, the same rules governing capital gains or income apply, just as they would if an individual were selling Bitcoin. For instance, in some countries, profits might be considered part of the entrepreneur’s personal income, subject to personal income tax brackets.
However, incorporated businesses—those subject to corporate income tax—often benefit from a more favorable tax framework. Unlike individuals, who may face restrictions on offsetting gains and losses across different asset classes, corporations can generally integrate realized gains or losses on Bitcoin transactions directly into their annual profit and loss accounts. This can lead to a more flexible and sometimes more advantageous tax position.
The specific tax rates and treatments vary significantly by jurisdiction. For example, in France and many Western countries, corporations might face corporate tax rates of around 25%, which could be lower than the flat-rate taxes individuals pay on investment gains.
Because of these differences, some business owners choose to purchase and hold Bitcoin through their corporate structures, as doing so can provide more efficient tax planning opportunities. As always, it is advisable to consult a tax professional who is familiar with the rules in the relevant jurisdiction(s) to ensure compliance and to optimize the tax strategy.
Quiz
Quiz1/5
biz1013.2
Why is volatility considered a natural aspect of Bitcoin as an emerging asset?