Bitcoin treasury firms can outperform BTC... but is the risk worth taking?

Bitcoin treasury companies promise to amplify returns over investing in Bitcoin alone, but does the potential upside outweigh the risks to the downside?

There are now 179 listed companies holding Bitcoin on their balance sheets, all following variations of the same simple formula:

Raise capital on traditional markets, buy Bitcoin and attempt to increase the amount of BTC that backs each share faster than the company dilutes shareholders.

According to Mark Palmer, managing director and senior equity research analyst at StoneX, that’s how treasury companies attempt to “beat” Bitcoin’s returns.

Making that equation work is a lot easier when the price of Bitcoin is going up and investors are happy to fund the next spree of purchases. Unfortunately, the mechanics work in both directions.

When the premium evaporates, investor enthusiasm wanes. Financing gets harder, debt and yield obligations remain, and the same structure that outperformed the asset magnifies the losses on the way down. No surprise that the 50 largest Bitcoin treasury companies bled $83 billion in market value since July 2025.

Metaplanet’s recent shareholder backlash shows the sort of questions that arise when treasury companies dilute their shareholders too much.

Treasury companies are more likely to need to raise money in bear markets, but this creates a potential problem. Palmer says:

So are the outsize returns on offer during the bull market, worth it for the downside risks during the bear?

For all the complexity around Bitcoin treasury companies, the basic test for potential investors is relatively simple. Do shareholders end up with more Bitcoin backing each share over time?

Palmer says investors should look past the headline number of Bitcoin a company holds and focus instead on “Bitcoin per fully diluted share, net of debt and preferred stock claims.”

179 Bitcoin treasury companies as of September 2026. Source: SatsIntel