From CoinShares Research Blog by Max Shannon
This report examines the increasing trend of Bitcoin holdings by public companies and the performance impact of these holdings on stock prices and volumes. The analysis includes a historical perspective on Bitcoin treasuries and compares the stock performance of companies with Bitcoin on their balance sheets against Bitcoin (BTC) itself and the NASDAQ index.
Bitcoin Treasuries in Public Companies
The first chart illustrates the growth of Bitcoin holdings by publicly traded companies. The data covers a period from August 2020 to late 2024 and highlights the following key trends:
- Steady accumulation with a brief hiccup: A small selection of public companies have steadily increased their Bitcoin holdings over time, with significant growth observed in late 2023 and early 2024. The primary exception occurred at the end of Q2 2022, when Tesla sold 75% of its Bitcoin holdings, reducing its position from 38,880 BTC to 9,720 BTC. At the time, this sale amounted to approximately $576 million; however, as of this report, the same holdings would be valued at around $3 billion. During an earnings call, Elon Musk addressed the sale, stating: “This should not be taken as some verdict on Bitcoin… [it’s] a sideshow to a sideshow,” in reference to the company’s focus on accelerating electric vehicle adoption. Additionally, Bitcoin group sold 179 BTC — 5% of its holdings — at a value of $3 million. That same amount of Bitcoin would now be worth approximately $18 million.
- More upside volatility than downside volatility, but improved stability overall: Bitcoin has historically exhibited greater upside volatility than downside volatility, as the asset class has monetised from $0 to over $2tn. This can be attributed to several factors, but ultimately resulting in increased spot flows and trading volumes. The 30-day volatility is around 47% annualised, down from a peak of 113% annualised, since the start of the data set (just before MSTR started buying BTC), although has been far higher before.
- While Bitcoin’s volatility should continue to decline over time, it is also likely to remain more volatile than traditional investment vehicles, given that it is the first truly supply-constrained global asset. As Bitcoin approaches the upper end of the adoption S-curve — arguably analogous to the current stage of internet adoption — volatility may begin to stabilise. This would likely occur if/when:
- Bitcoin financial products have fully matured, and
- It has been widely adopted as both a store of value and a medium of exchange.
Until then, as we progress through the steep phase of the S-curve, with flows entering into a truly fixed-supply asset, volatility is likely to remain relatively high, with a continued bias towards the upside. Overall, this should be beneficial over the long term for companies holding Bitcoin, and this is what we see evidenced by the trends observed for companies actually doing it in recent years.
Performance of Companies with Bitcoin on Their Balance Sheets
The third chart compares the median stock performance of companies holding Bitcoin against BTC and the NASDAQ index. The performance is analysed over different time horizons:
- Outperformance: Since each company’s initial Bitcoin purchase, the median stock price performance of these companies has outperformed the NASDAQ but not Bitcoin. This is arguably the most important metric to consider, as it confirms that adding Bitcoin to a company’s balance sheet is accretive to valuation, without relying on selective time horizons.
- When analysing specific periods, the outperformance relative to the NASDAQ is most pronounced over the first six months. This is likely because adding Bitcoin introduces additional beta to the underlying equity, increasing the probability of stock price outperformance, particularly when Bitcoin itself performs well.
- Underperformance: Over 30-day and three-month periods, the median underperformance of companies holding Bitcoin on their balance sheets appears to be driven by declines in Bitcoin’s price, which in turn drags down the equity valuations of these companies. This is a drawback of increased equity beta, as valuations become more closely tied to the narrative and price movements of Bitcoin. Additionally, this effect is likely compounded — at least initially — by investor uncertainty regarding how to assess or value a company that holds Bitcoin as a treasury asset.
- Over a longer one-year period, it may seem disappointing that the median price performance of companies with Bitcoin on their balance sheets has underperformed both Bitcoin and the NASDAQ. However, this should be interpreted with caution, as the data set is relatively small. With only ten companies in the sample, the findings are somewhat skewed, as most corporate Bitcoin adoption has occurred within the past year. The sample includes a mix of struggling, publicly traded companies alongside notable success stories and turnaround cases such as MicroStrategy, Tesla, Bitcoin Group, Boyaa Interactive, and Banxa Holdings.
Final Thoughts
Bitcoin treasuries in public companies continue to grow, reflecting an increasing institutional acceptance of the asset. While the price may remain volatile due to the likely increased global adoption into a fixed supply asset, the long-term performance benefits suggest that Bitcoin adoption among corporations should continue to expand in the future.
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