Investors buying MSTR stock are not just buying Bitcoin, but are also buying the "ability to continuously accumulate Bitcoin in the future." This article is based on a piece by Will Owens, published by Galaxy, and organized, translated, and written by Foresight News. (Background: MicroStrategy's strategy of buying an additional $530 million in BTC holdings approaches 600,000 coins; Michael Saylor: You will only wish you had bought more originally) (Background context: Is MicroStrategy in trouble for buying Bitcoin? Five class action lawsuits accuse the strategy of investment including "false statements") Companies that have incorporated Bitcoin into their balance sheets have become one of the most watched narratives in the public market by 2025. Although investors have various direct ways to obtain Bitcoin positions (ETFs, spot Bitcoin, wrapped Bitcoin, futures contracts, etc.), many still choose to gain Bitcoin risk positions by purchasing stocks of Bitcoin reserve companies that trade at a significant premium to their Bitcoin net asset value (NAV). This premium refers to the difference between the company's stock price and its per-share Bitcoin holding value. For example, if a company holds $100 million worth of Bitcoin and has 10 million shares outstanding, its per-share Bitcoin NAV would be $10. If the stock price is $17.5, the premium rate would be 75%. In this context, mNAV (i.e., net asset value multiple) reflects how many times the stock price is relative to Bitcoin NAV, while the premium rate is the percentage of mNAV minus 1. Ordinary investors may wonder: why can the valuation of such companies far exceed the value of their Bitcoin assets? Leverage effect and capital acquisition ability The most important reason for the premium of Bitcoin reserve company stocks over their Bitcoin assets may be their ability to leverage through public capital markets. These companies can raise funds to increase their Bitcoin holdings by issuing bonds and stocks. Essentially, they act as high β proxy tools for Bitcoin, amplifying Bitcoin's sensitivity to market fluctuations. The most commonly used and effective means in this strategy is the "at-the-market" (ATM) stock issuance program. This mechanism allows companies to gradually issue new shares at the current stock price with minimal market impact. When the stock price is at a premium to Bitcoin NAV, the amount of Bitcoin that can be purchased for every $1 raised through the ATM program will exceed the dilution of Bitcoin holding per share caused by the issuance. This creates a "per-share Bitcoin holding appreciation loop," continuously amplifying Bitcoin positions. Strategy (formerly known as MicroStrategy) is the best example of this strategy. Since 2020, the company has raised billions of dollars through convertible bond issuance and secondary equity financing. As of June 30, Strategy holds 597,325 Bitcoins (approximately 2.84% of the circulating supply). These financing tools are only applicable to publicly traded companies, allowing them to continuously increase their Bitcoin holdings. This not only amplifies Bitcoin positions but also creates a compound narrative effect, where each successful fundraising and Bitcoin increase reinforces investors' confidence in this model. Therefore, investors buying MSTR stock are not just buying Bitcoin, but are also buying the "ability to continuously accumulate Bitcoin in the future." How large is the premium? The table below compares the premium situations of several Bitcoin reserve companies. Strategy is the publicly traded company with the largest Bitcoin holdings in the world and is the most recognized representative in this field. Metaplanet is the most aggressive Bitcoin accumulator (its transparency advantages will be detailed later). Semler Scientific entered this trend earlier, starting to purchase Bitcoin last year. Meanwhile, The Blockchain Group from France indicates that this trend is spreading globally from the U.S. Some Bitcoin reserve companies' NAV premium rates (as of June 30; assuming a Bitcoin price of $107,000): Although Strategy's premium rate is relatively moderate (around 75%), the premium rates of smaller companies like The Blockchain Group (217%) and Metaplanet (384%) are significantly higher. These valuations indicate that market pricing reflects not only the growth potential of Bitcoin itself but also a comprehensive consideration of capital market access, speculative space, and narrative value. Bitcoin yield: A key indicator behind the premium One of the core indicators driving the premium of these companies' stocks is the "Bitcoin yield." This indicator measures the growth of the company's per-share Bitcoin holdings over a specific period, reflecting its efficiency in accumulating Bitcoin using fundraising capabilities without causing excessive equity dilution. Among them, Metaplanet stands out for its transparency, as its official website provides [real-time Bitcoin data dashboards] that dynamically update Bitcoin holdings, per-share Bitcoin holdings, and Bitcoin yields. Source: Metaplanet Analytics (https://metaplanet.jp/en/analytics) Metaplanet has publicly released proof of reserves, while other companies in the same industry have not yet adopted this practice. For example, Strategy has not adopted any on-chain verification mechanism to prove its Bitcoin holdings. At the "Bitcoin 2025" conference in Las Vegas, [executive chairman Michael Saylor explicitly opposed] the public proof of reserves, stating that it would become a "bad idea" due to security risks: "This would weaken the safety of issuers, custodians, exchanges, and investors." This viewpoint is controversial; on-chain proof of reserves only requires public keys or addresses, not private keys or signature data. Since Bitcoin's security model is based on the principle of "public keys being safely shareable," publicly sharing wallet addresses does not jeopardize asset safety (this is the nature of the Bitcoin network). On-chain proof of reserves provides investors with a direct way to verify the authenticity of a company's Bitcoin holdings. What will happen if the premium disappears? The high valuations of Bitcoin reserve companies currently exist in a bull market environment characterized by rising Bitcoin prices and high retail enthusiasm. No Bitcoin reserve company's stock price has remained long-term below NAV. The premise of this business model is the continuous existence of the premium. As [VanEck analyst Matthew Sigel pointed out]: "When the stock price falls to NAV, equity dilution will no longer be strategically meaningful and will become value extraction." This statement directly addresses the core vulnerability of the model; the ATM stock issuance program (the capital engine of these companies) essentially relies on stock price premiums. When the stock price is above the per-share Bitcoin value, equity fundraising can achieve appreciation of per-share Bitcoin holdings; but when the stock price drops near NAV, equity dilution will weaken rather than enhance shareholders' Bitcoin positions. This model relies on a self-reinforcing loop: Stock price premium supports fundraising ability Fundraising is used to increase Bitcoin holdings Increasing Bitcoin holdings reinforces the company narrative Narrative value maintains stock price premium If the premium disappears, this loop will be broken: financing costs will rise, Bitcoin accumulation will slow, and narrative value will weaken. Currently, Bitcoin reserve companies still enjoy advantages in capital market access and investor enthusiasm, but their future development will depend on financial discipline, transparency, and the ability to "increase per-share Bitcoin holdings" (rather than simply accumulating total Bitcoin amounts). The "option value" that makes these stocks attractive in a bull market may quickly transform into a burden in a bear market. Related reports Understanding the essence of Strategy MicroStrategy's "crazy Bitcoin purchases": is it...