Coin WorldSaturday, Jul 5, 2025 5:05 pm ET

1min read

Bitcoin treasury companies, which accumulate the digital asset often through borrowed funds, offer clients indirect exposure to Bitcoin through their stock. This has sparked a debate within the crypto community, with some viewing these companies as a bridge between Bitcoin and traditional finance, while others see them as a means to lure Bitcoin enthusiasts into traditional financial instruments.

In 2021, Elon Musk highlighted the importance of self-custody of private keys, a principle that seems to have taken a backseat with the rise of Bitcoin ETFs and treasury companies. These entities allow investors to gain exposure to Bitcoin without directly holding the cryptocurrency, through assets like stocks of Bitcoin treasury companies or ETFs holding Bitcoin. The value of these assets is tied to Bitcoin's price movements, making them a form of "paper Bitcoin."

Proponents of treasury companies argue that they provide an accessible entry point for institutional and corporate investors into the crypto market. For instance, buying stocks of Strategy, a Bitcoin treasury company holding nearly 600,000 bitcoins, exposes corporate buyers to Bitcoin's price fluctuations without the complexities of direct Bitcoin purchases. As these companies continue to accumulate bitcoins, they increase buying pressure, potentially stabilizing Bitcoin's price.

However, critics contend that treasury companies are not truly embracing the Bitcoin ethos. They operate within the traditional finance sector, promoting their stocks to both TradFi and crypto investors. These companies do not pay employees in crypto, accept Bitcoin as payment, or offer any Bitcoin experience to their clients and employees. This has led some to view treasury companies as agents of traditional finance, enticing Bitcoin investors to switch to traditional instruments like stocks.

The promotional activities of treasury companies have also drawn criticism from self-custody advocates. They argue that Bitcoin-related media platforms are dominated by promotional content for these companies, leaving little space for discussions on independence and self-custody. Additionally, there are concerns about the safety of treasury companies' strategies. A sudden drop in Bitcoin's price could trigger a "death spiral," potentially leading to the collapse of even large companies like Strategy. The centralized nature of these companies further reduces their chances of recovery after such an event.