Why Bitcoin Treasury Companies Are Taking Off and What It Means for Midmarket Private Companies

By: Moish E. Peltz and Kate L. Dargan

Bitcoin has graduated from a fringe experiment to a mainstream balance sheet asset. In 2025 alone, publicly traded companies and private investors acquired more than 157,000 BTC—over $16 billion at today’s price—demonstrating that corporate treasurers increasingly view Bitcoin not as a speculative punt but as a long-term treasury asset. For midmarket private businesses, the question is no longer whether Bitcoin belongs on the balance sheet, but how to do it responsibly and advantageously. 

The Rise of Bitcoin Treasury Companies 

When MicroStrategy CEO Michael Saylor announced in August 2020 that the firm would convert surplus cash into Bitcoin, few predicted the ripple effect it would have. Five years later, MicroStrategy controls more than 214,400 BTC, worth roughly $22 billion at the current market cap, and continues to raise capital expressly for Bitcoin purchases under an ongoing $21 billion at-the-market program. Its stock performance—up nearly fivefold since joining the Nasdaq-100—has inspired a class of copycats across every continent. 

A growing cohort of “Bitcoin treasury companies” now treats BTC as a primary corporate asset rather than a side investment. Recent research counts at least 126 publicly traded companies with bitcoins on their balance sheet, holding a combined 819,857 BTC—almost 4 percent of the total 21 million supply. The types of public companies now holding Bitcoin have become quite diverse, for example: 

• Dedicated Bitcoin miners (Marathon, Riot, CleanSpark, Hut 8, Cipher, Core Scientific) have grown their treasuries largely from self-mined coins they are increasingly choosing not to sell. 

• Others—MicroStrategy, Tesla, Block, Coinbase, GameStop, Semler—bought Bitcoin as a treasury asset, often funding purchases with share or debt offerings. 

• U.S.-listed Bitcoin ETFs (IBIT, FBTC, GBTC, etc.) also hold very large stacks, but they are funds, not operating companies, and not very relevant for purposes of this discussion. 

Two tailwinds accelerated adoption in 2024-25. First, the FASB fair value accounting rule (effective for fiscal years ending after December 15, 2024) allows companies to mark Bitcoin up as well as down, eliminating the asymmetric impairment charges that once deterred CFOs. Second, regulatory clarity arrived through the U.S. approval of spot Bitcoin ETFs (exchange-traded funds) and, in March 2025, an executive order establishing a U.S. Strategic Bitcoin Reserve—a signal that nation states now view BTC as a legitimate store of value. 

The business model itself continues to evolve, with special purpose Bitcoin holding companies now emerging, like ProCap Financial (which pairs a traditional SPAC with a Bitcoin-native lender, with the company now advertising that they will both hold BTC and monetize it through derivatives and yield products, illustrating that treasury strategies now encompass more than passive accumulation), and the merger of KindlyMD, Inc. and Nakamoto Holdings Inc. which announced the successful closing of $51.5 million in private placement equity financing (PIPE) to support their bitcoin treasury initiative and help other companies adopt similar Bitcoin treasury strategies. 

What Is Driving Companies to Allocate Capital to Bitcoin? 

In boardrooms worldwide, the calculus boils down to risk management. Heightened macroeconomic uncertainty and geopolitical volatility have undermined confidence in fiat cash, pushing CFOs toward scarcer, more portable assets such as Bitcoin. 

Economic Uncertainties 

Persistent inflation—averaging 4 to 5 percent in most G7 economies since 2022—erodes the real value of corporate cash piles. Meanwhile, benchmark interest rates hover near cycle highs, yet still trail CPI, creating negative real yields on traditional “safe” instruments. Research from Crypto.com notes that Bitcoin’s fixed 21 million supply and transparent issuance schedule make it an increasingly attractive hedge against currency debasement and duration risk. 

Compounding the appeal, the price of Bitcoin reached a new all-time high of $111,814 in March 2025, reflecting renewed institutional demand and reinforcing its reputation as “digital gold.” Although price volatility remains, the long-term trend offers a compelling upside scenario relative to low yield money market funds or short-term Treasuries. 

Heightened Geopolitical Risks 

Global sanctions regimes, capital controls, and regional banking crises have reminded executives that access to liquidity can be curtailed overnight. Bitcoin’s borderless settlement layer allows multinational companies to move value 24/7 without relying on correspondent bank networks that may become politicized. The executive order creating a U.S. reserve underscores how even sovereigns are diversifying reserves—a fact not lost on corporate treasurers wary of the next geopolitical flashpoint. 

Other Assets 

While Bitcoin remains a staple in many crypto-native treasuries due to its liquidity and brand recognition, several companies are also diversifying their holdings by including other major digital assets: notably, Ethereum (ETH) and Solana (SOL). Just as Strategy turbo-charged its valuation with a Bitcoin balance-sheet strategy, other companies are making (non-Bitcoin denominated) digital-asset treasuries their core investment thesis, for example, SharpLink for ETH, and DeFi Development, Upexi and Sol Strategies for SOL. 

How Can Midmarket Private Companies Execute a Bitcoin Treasury Strategy? 

1. Adopt a Written Treasury Policy. Begin with obtaining internal approvals, including (if necessary) board approval of an investment policy that defines allocation limits, rebalancing triggers, and long-term objectives (e.g., target holding period of five years or more). Clearly distinguish between core treasury BTC and trading inventory to prevent commingling. 

2. Address Legal and Regulatory Exposure Upfront. 

• Securities law: Private placements or convertible notes used to finance BTC purchases may trigger Reg D or Reg S compliance. 
• Commodities regulation: Derivative hedging (options, futures) brings CFTC jurisdiction. 
• Tax: Unlike publicly traded companies that can rely on fair value GAAP, private firms must prepare for mark to market or ordinary income treatment on certain dispositions. Engaging counsel experienced in digital assets is critical. 
• Custody and bankruptcy remoteness: Evaluate qualified custodians offering multisig cold storage. Consider triparty agreements to segregate assets from custodian insolvency risk. 

3. Layer in Risk Mitigation Tools. Midmarket CFOs can dampen volatility through periodic dollar cost averaging or by pairing spot holdings with short-dated covered call strategies that generate yield while capping extreme upside. Insurance wrappers for “specie” cold wallets are now available, although premiums can be significant. 

4. Plan for Audit and Reporting. Select an audit firm versed in digital asset attestations. Establish continuous monitoring of wallet addresses and maintain immutable on-chain proofs for year-end confirmations. Doing so not only satisfies auditors but also boosts stakeholder confidence in the company’s Bitcoin holdings. 

The Future of Bitcoin Treasury Companies 

Looking ahead, three trends appear likely: 

• Convergence with Traditional Finance. With household name asset managers already issuing spot Bitcoin ETFs and investment-grade debt backed by BTC, the once stark line between crypto firms and public companies will blur further. Expect treasury desks to treat Bitcoin alongside FX and commodities rather than as an exotic outlier. 

• Secondary Market Innovation. As ProCap Financial demonstrates, treasury companies will increasingly deploy their Bitcoin to generate operating revenue through collateralized lending, derivatives arbitrage, and Lightning Network payment services. This could unlock a virtuous cycle: higher returns attract more capital, which in turn tightens the circulating supply and supports the long-term price of Bitcoin. 

• Greater Regulatory Harmonization. The combination of FASB fair value rules in the U.S., proposed MiCA II amendments in the EU, and similar initiatives in Asia will make it easier—and arguably safer—for midmarket enterprises to hold Bitcoin. Over time, we anticipate regional competition to attract Bitcoin treasury companies with favorable tax and reporting regimes. 

Conclusion 

Bitcoin treasury strategy is no longer the sole province of billion-dollar public companies. Midmarket private firms can—and increasingly do—allocate a portion of their cash to Bitcoin to hedge inflation, diversify geopolitical risk, and participate in the upside of a scarce digital asset with a trillion-dollar market cap. By establishing robust governance, understanding legal obligations, and working with experienced advisers, companies can add Bitcoin to their balance sheets in a way that bolsters, rather than endangers, corporate resilience. In a world of rapid macro change, the early movers are already setting the pace. The time to explore a prudent Bitcoin treasury asset allocation may be now—before “digital gold” becomes as commonplace as its physical counterpart. 

Questions? 

Our Digital Assets attorneys are here to help. Whether you're exploring your first Bitcoin treasury allocation or navigating regulatory and tax considerations, we’re ready to assist. Contact us to learn how your company can approach digital asset strategies with confidence.

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Kate L. Dargan is a 2025 Summer Law Clerk at Falcon Rappaport & Berkman in the Intellectual Property, Digital Assets, and Litigation & Dispute Resolution Practice Groups. She is a rising 3L at Hofstra Law, where she serves as the Managing Editor (Fact Pattern Writer) of Moot Court Board and the Page Proof & Resource Editor of Family Court Review.