Analysis of Digital Asset Treasury Strategies and Their Impact on BTC/ETH Holding Companies

The digital asset treasury (DAT) strategy has become an important topic in the cryptocurrency field. Taking a well-known company as an example, since implementing its Bitcoin strategy in 2020, its stock price has skyrocketed from $13 to $455, an astonishing increase. This inevitably raises a key question: Is this significant growth due to the rise in Bitcoin prices, or is it a result of the company's adopted crypto reserve strategy?

In-depth analysis reveals that in the company's stock price increase of 35 times:

• 11 times from the Bitcoin price rising from $11,000 to $118,000
• The 25x is attributed to its treasury strategy, mainly reflected in the increase of Bitcoin held per share.

This data clearly indicates that the treasury strategy has a far greater impact on the company's valuation than the increase in the token price itself.

The company's DAT strategy primarily increases the number of tokens held per share through the following methods:

1. When the stock issuance price is higher than the net asset value per share, issuing new shares can increase the number of tokens per share.
2. Use token price fluctuations to reduce borrowing costs, thereby increasing investment returns.
3. Financing through convertible bonds or preferred stocks to limit equity dilution.

It is worth noting that the volatility of ETH is higher than that of BTC, so this strategy may have a more significant impact on companies holding ETH.

Another company, Bitmine, recently announced its Ethereum treasury strategy and quickly completed the transaction. Comparing the performance of the two companies in the early stages of strategy implementation:

• Bitmine acquired $1 billion worth of ETH within 7 days.
• Another company acquired $250 million worth of BTC in the same timeframe.

These cases clearly illustrate that adopting a digital asset treasury strategy can not only increase the amount of cryptocurrency held by the company but also significantly enhance the company's market value. As more companies begin to explore this field, we may see more innovative financial management approaches emerge.

However, it is worth emphasizing that despite the excellent performance of this strategy in recent times, the high volatility of the cryptocurrency market means that the associated risks cannot be ignored. Companies need to comprehensively assess risks when formulating similar strategies and establish corresponding risk management measures.