Crucial Insights
- Businesses are increasingly considering Bitcoin and other digital currencies as vital reserve assets, creating specialized corporate divisions to manage crypto holdings on their financial records and securing funds specifically to buy them for reserve purposes.
- These dedicated units provide a means for investors to gain access to digital assets, while also offering a more regulated pathway into this asset class through the registration and stock market listing of these entities.
- Diverse financial arrangements are being utilized to gather capital, including stock sales, convertible bonds, private investments in public equity (PIPEs), and mergers via special purpose acquisition companies (de-SPACs), showcasing the versatility of financial markets in facilitating strategies focused on long-term digital asset accumulation.
- While Bitcoin remains the primary focus, treasury strategies are broadening to include Ethereum and Solana, indicating a growing institutional interest in the broader digital asset landscape.
- Companies contemplating exposure to digital assets should carefully assess how financial market mechanisms can be strategically employed to support treasury accumulation as part of a comprehensive corporate financial plan.
Recent shifts in the regulatory environment surrounding cryptoassets, particularly within the United States (refer to “A Plan To Authorize and Regulate Stablecoins Could Soon Become US Law“), have prompted more companies and investors to integrate Bitcoin and other cryptocurrencies into their strategic expansion initiatives. Correspondingly, many businesses are establishing dedicated entities to hold cryptoassets – primarily Bitcoin – on their balance sheets, thus offering investors exposure to these assets through conventional stock markets.
Firms like MicroStrategy (operating as Strategy), Twenty One Capital, and others are securing funding not only for operational expenses but also with the clear objective of acquiring cryptoassets as reserve assets. These transactions are designed from the outset to foster long-term accumulation, representing a new paradigm where capital markets are directly leveraged to finance cryptoasset treasury strategies.
The popularity of this approach is on the rise. According to analysts at Bernstein Private Wealth Management, publicly traded companies worldwide may allocate as much as $330 billion to Bitcoin over the next five years, compared to approximately $80 billion currently. This highlights the increasing significance of cryptoassets in corporate finance and their growing prevalence in institutional investment approaches.
Cryptoassets are attractive to corporate treasuries for several compelling reasons. They:
- Present opportunities for long-term value appreciation.
- Serve as a safeguard against inflation and the devaluation of traditional currencies.
- Project an image of innovation and forward-thinking to investors.
For many companies, holding cryptoassets promotes diversification, improves balance sheet performance, and provides direct participation in the digital asset economy.
Varied Transaction Methods
To fund these initiatives, companies are utilizing a diverse array of transactional structures, encompassing:
- Public offerings of company shares.
- Convertible bonds.
- Mergers involving special purpose acquisition companies (de-SPACs).
- Private investments in public equity (PIPEs).
Among these, convertible bonds have gained traction as a particularly appealing method due to their dual nature: They offer investors a degree of protection through their debt-like characteristics, alongside the potential for gains linked to equity performance, especially when cryptoasset accumulation and rising valuations improve stock performance. In some instances, these bonds are secured by the underlying cryptoassets, providing enhanced financial security.
These tools are proving particularly effective for newly listed or rapidly expanding companies seeking to quickly grow their crypto treasuries in a capital-efficient manner. In especially sought-after deals, some issuers have obtained zero-coupon convertible bonds.
MicroStrategy remains the premier example, consistently issuing both shares and convertible debt to expand its Bitcoin holdings. In early 2025, MicroStrategy broadened its funding sources to include preferred stock, specifically issuing “perpetual strike preferred stock” and a unique “perpetual strife preferred stock” with fixed dividend rates in perpetuity. This diversification of capital sources further underscores the multifaceted approach to accumulating Bitcoin as a primary treasury asset that is gaining traction in the broader market.
For instance, in April 2025, Twenty One Capital announced a $3.6 billion de-SPAC merger, backed by Tether, SoftBank and Cantor Fitzgerald, and raised over $640 million in a PIPE that included both equity and convertible senior notes secured by bitcoin.1
Other notable transactions include:
- Trump Media & Technology Group’s $2.5 billion deal, divided between equity and secured convertible notes.
- Nakamoto Holdings’ $710 million PIPE in connection with its merger with KindlyMD.
- GameStop’s public announcement of a $1.75 billion convertible note offering.
- Mercurity Fintech Holding’s $800 million funding plan.
Notably, this trend is no longer exclusive to Bitcoin. SharpLink Gaming raised $425 million, spearheaded by ConsenSys, to support a treasury strategy centered on Ethereum. DeFi Development Corp. and Classover Holdings have both announced multibillion-dollar capital raises to establish corporate treasuries based on Solana.
Possible Differentiation and Market Consolidation
The swift expansion in the number of cryptoasset treasury companies may necessitate the development of distinct features to attract investors. Important factors beyond the specific digital currency (or currencies) held could include:
- The overall magnitude of a company’s cryptoasset holdings.
- The management team’s proficiency and track record in navigating the digital asset market.
- The financial strength of the founder shareholders supporting the company.
- Any exclusive underlying technology that grants a competitive edge.
This environment could potentially trigger market consolidation, as companies with superior positioning based on these factors acquire other entities.
Another potential evolution in this sector involves the strategic implementation of multicurrency treasury strategies. By potentially lessening the impact of single-asset volatility and capturing broader growth across the digital asset economy, such diversified approaches may appeal to investors seeking comprehensive cryptoasset exposure through traditional equity markets.
As the market for cryptoasset treasury companies continues to mature, companies considering exposure to cryptoassets should assess the spectrum of available financing options as part of a broader capital markets strategy. This includes evaluating how different transactional structures can best align with their treasury management objectives, with a focus on standing out in a competitive environment and positioning for potential market consolidation.
(See also “How Asset Managers Are Capitalizing on Hong Kong’s Regulations Permitting Virtual Asset Funds.”)
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1 Skadden advised Tether in this transaction.
This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.