The phrase “bitcoin treasury stock” sounds like jargon, but it describes something simple and increasingly important: a public company that holds Bitcoin on its balance sheet as a reserve asset, the way a more traditional company might hold cash or Treasury bills. Strategy, the company formerly known as MicroStrategy, turned this idea into a full corporate identity, and it is the foundation of the 12% yield that Nick Giambruno is now pitching at Financial Underground.
What a Bitcoin Treasury Company Does
The concept starts with a conviction: that Bitcoin is a durable store of value, a hard asset whose fixed supply makes it a hedge against currency debasement. A bitcoin treasury company acts on that conviction at the corporate level. Instead of sitting on cash that loses purchasing power, it converts its reserves into Bitcoin and lets the appreciation build shareholder value.
Strategy was the pioneer and remains the largest by far. Its chairman, Michael Saylor, has become the most visible advocate of the model, arguing that a company with spare cash and access to capital markets should hold the hardest money available rather than a depreciating fiat balance. A handful of other companies have followed, including the healthcare technology firm Semler Scientific and the Japanese firm Metaplanet, but none at Strategy’s scale.
How the Model Is Funded
The distinctive feature of a bitcoin treasury is how it finances its purchases. Because these companies want to buy more Bitcoin than their operating cash flow would allow, they tap the capital markets. Strategy has issued convertible bonds, sold common stock, and more recently created a family of preferred shares, all to raise money that flows directly into Bitcoin.
This is the “flywheel” that supporters describe. As Bitcoin appreciates, the value of the treasury grows, the stock rises, and the company can raise capital on increasingly favorable terms, which it uses to buy more Bitcoin. It is a powerful loop while it works. The risk, of course, is that the same loop runs in reverse when Bitcoin falls, which we detail in our MSTR stock explainer.
Where the 12% Yield Fits In
Giambruno’s pitch is an income product built on top of this treasury. The instrument, STRC, is one of Strategy’s preferred shares, and it pays a 12% dividend funded by the company’s Bitcoin-backed balance sheet. That is the clever twist: you do not have to own the volatile common stock to earn an income stream from the bitcoin treasury model.
The pitch leans on the idea that the collateral behind the yield, Bitcoin, “tends to appreciate in times of inflation,” so the safety profile may strengthen over time. That is a coherent argument, but it also means the yield’s safety is entirely a function of Bitcoin’s price path. We break down the instrument itself in our STRC explainer.
The Honest Trade-Off
The appeal of bitcoin treasury stocks is genuine: they offer a regulated, liquid way to get Bitcoin exposure in an ordinary brokerage account, with the tax and custody friction handled for you. The cost is concentration. These are not diversified businesses; they are single-asset bets wrapped in a corporate structure, and their share prices swing with Bitcoin, often with more amplitude.
For investors who already believe in Bitcoin and want the cleanest public-market expression of that view, the category is worth understanding. For income investors drawn to the yield, the key question is whether a 12% payout is fair compensation for the risk that the underlying asset, and therefore the dividend coverage, could fall sharply. That is a question each investor has to answer honestly, and it is the difference between buying the story and understanding the trade.
How to Evaluate a Bitcoin Treasury
If you are going to buy a bitcoin treasury stock, or an income product built on one, a handful of numbers separate a disciplined story from a hope. Start with how much Bitcoin the company holds and what it paid for it, the cost basis, because that tells you the unrealized gain or loss sitting on the balance sheet. Then look at the premium or discount: whether the stock trades above or below the value of the Bitcoin it holds, which is the market’s verdict on management and on the funding machine.
Next, read the funding terms. How much debt and preferred stock has the company issued to buy Bitcoin, what does it cost, and when does it mature or convert. That stack determines how much room the treasury has to keep buying, and how much pressure it faces when Bitcoin falls.
Finally, ask what happens in a drawdown. The May and June 2026 selloff is the recent reference point: Strategy sold Bitcoin to defend its preferreds and protect the balance sheet. Watching how a treasury behaves when its asset falls is more informative than any bull-market pitch.
Ready to see the research? Click here to access Nick Giambruno’s report.
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