Strategy (MicroStrategy) pioneered the idea that companies are investing in Bitcoin.
Companies that do nothing but invest in Bitcoin have shown the possibility of offering higher returns than Bitcoin itself.
The basic premise of a Bitcoin-centric business model is that Bitcoin prices continue to rise permanently.
10 stocks I like more than Bitcoin›
The Financial World: The emergence of companies that only invest in Bitcoin has emerged. (Cryptography: BTC). These companies have a single, lonely mission. Buy and hold as many bitcoins as possible.
The most well-known example is MicroStrategy (NASDAQ:MSTR)I am currently running my business as a strategy. But there are more and more others, and together they are often referred to as “micro-Strategy Copycats.” So is it worth investing in these companies?
It is difficult to discuss the success of a strategy. The strategy pioneered the idea of becoming a Bitcoin Finance Company (BTC). Strategic stocks have outperformed Bitcoin since the Bitcoin acquisition strategy began in August 2020. And in fact, the strategy outperformed all S&P 500 companies between 2020 and 2024.
This helps explain the appeal of the Bitcoin Finance Company model. Simply put, these companies can offer higher returns than Bitcoin, the world’s most performant asset in the past decade.
In theory, you can make more money by investing in strategies than investing in Bitcoin. Check out the results for 2025. Bitcoin has increased by just 2% per year, while strategy has increased by 36% (as of May 7th). So we’re talking about the potentially large performance gap between Bitcoin and companies investing in Bitcoin.
At the end of 2024, some companies began loading Bitcoin for their balance sheets. Bitcoin miners and cryptocurrency exchanges clearly require Bitcoin for daily operation. But we’re talking about companies in an industry that has nothing to do with cryptography. For example, did you know that biotech companies are currently loading Bitcoin?
After all, there are more ways investors can invest in Bitcoin. Obviously, they can invest directly in Bitcoin via cryptocurrency exchanges such as Coinbase Global (NASDAQ: Coin) Or crypto trading platforms such as Robinhood (NASDAQ: Food).
Or, just as easily, they could invest in various Bitcoin Exchange Trade Funds (ETFs). The most popular of these is the Spot Bitcoin ETF, which offers investors a one-to-one tracking at spot prices of Bitcoin. If you feel a little unwell, you can easily invest in other Bitcoin ETFs that use financial derivatives to provide a little extra pop.
The story continues
Image source: Getty Images.
And now you can also invest in companies that only invest in Bitcoin. These companies can provide superior performance for both Bitcoin and Spot Bitcoin ETFs within a highly regulated corporate structure.
The mathematics behind this is interesting. Because it relies on new metrics such as Bitcoin per share (BPS). This is calculated as the amount of Bitcoin owned by the company, divided by the number of outstanding shares (on a fully diluted basis). As long as Bitcoin per share is increasing, the company can provide value to its shareholders.
By investing in these companies, you are basically betting that they can do more with their bitcoin than they can with your bitcoin. For example, the strategy pioneered the idea of using convertible debts to fund new Bitcoin purchases. This is something you can’t do as an individual investor. At best, you could use your credit card to fund a new Bitcoin purchase, but the cost of doing so is astronomical.
Think about Bitcoin per share in the same way you think about earnings per share. If a company is above earnings per share, its overall valuation should rise, right? Also, if a company is cranking bitcoin more than per share, its overall valuation should also rise.
This may all sound like a resonance of the rumours of companies that only invest in Bitcoin. But here’s the catch. It’s a good idea that Bitcoin prices continue to rise. If Bitcoin prices stagnate or value drops, the business model will fall into trouble. Worse, if things go south, you won’t own Bitcoin. The company does that.
For Bitcoin purists, the main attraction of Bitcoin is that it allows you to buy and sell peer-to-peer digital currencies that do not require financial intermediaries. Anyone who bought Bitcoin in the early days emphasized the following: Make sure you’re independent using your own blockchain wallet and own Bitcoin.
However, over the past few years, Bitcoin investors have embraced more and more financial intermediaries. I get it – like ETFs and publicly available companies, it’s great to rely on what we know and let them figure out the hard crypto parts.
But now they are investing in companies that do nothing but invest in Bitcoin. We no longer invest directly in Bitcoin, but rather, we invest in companies that invest in Bitcoin for us.
This approach works well when Bitcoin prices are rising. And when Bitcoin prices are surged, it works very well. But how well does it work when Bitcoin prices start to fall?
As a result, my personal preference is to buy Bitcoin directly. Over time, I am sure Bitcoin is better than companies that are trying to outcoin Bitcoin.
Consider this before purchasing inventory with Bitcoin.
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Dominic Basulto has a position in Bitcoin. Motley Fool has jobs at Bitcoin and Coinbase Global. Motley Fools have a disclosure policy.
Should I invest in a company that only invests in Bitcoin? Originally published by The Motley Fool
