Is Wall Street crazy for choosing to buy MSTR stock at a 75% premium instead of buying 100,000 Bitcoin?

Investors buying MSTR stock are not just buying Bitcoin, but are also buying the "ability to continuously increase their Bitcoin holdings in the future."

Written by: Will Owens, Galaxy

Compiled by: AididiaoJP, Foresight News

Companies that incorporate Bitcoin into their balance sheets have become one of the most talked-about narratives in the public market for 2025. Although investors have various direct ways to gain exposure to Bitcoin (ETFs, spot Bitcoin, wrapped Bitcoin, futures contracts, etc.), many still choose to obtain Bitcoin risk exposure by purchasing shares of Bitcoin reserve companies that trade at a significant premium to Bitcoin's net asset value (NAV).

This premium refers to the difference between a company's stock price and the value of its Bitcoin holdings per share. For example, if a company holds Bitcoin worth 100 million dollars and has 10 million shares outstanding, its Bitcoin NAV per share would be 10 dollars. If the stock price is 17.5 dollars, then the premium rate would be 75%. In this context, mNAV (i.e., net asset value multiple) reflects how many times the stock price is the Bitcoin NAV, and the premium rate is the percentage after subtracting 1 from mNAV.

Ordinary investors may wonder: why can the valuations of such companies far exceed the Bitcoin assets themselves?

Leverage Effect and Capital Acquisition Ability

The most important reason for the premium of Bitcoin reserve company stock prices over their Bitcoin assets may be that they can leverage through public capital markets. These companies can raise funds by issuing bonds and stocks to increase their Bitcoin holdings. Essentially, they act as high β proxy instruments for Bitcoin, amplifying Bitcoin's sensitivity to market fluctuations.

The most commonly used and effective means in this strategy is the "market price issuance" ( ATM ) stock issuance plan. This mechanism allows companies to gradually issue stocks at the current stock price, with minimal market impact. When the stock price has a premium over the Bitcoin NAV, the amount of Bitcoin that can be purchased with every 1 dollar raised through the ATM plan will exceed the dilution of Bitcoin holdings per share caused by the issuance. This creates a "per share Bitcoin holding value appreciation cycle," continuously amplifying Bitcoin exposure.

Strategy (formerly MicroStrategy) is the best example of this strategy. Since 2020, the company has raised billions of dollars through convertible bond issuances and secondary equity financing. As of June 30, Strategy holds 597,325 Bitcoins (approximately 2.84% of the circulating supply).

These types of financing instruments are only suitable for listed companies, allowing them to continuously increase their holdings of Bitcoin. This not only amplifies their exposure to Bitcoin but also creates a compounded narrative effect, where each successful fundraising and increase in Bitcoin holdings reinforces investors' confidence in this model. Therefore, investors buying MSTR stock are not only purchasing Bitcoin but also buying the "ability to continuously increase their Bitcoin holdings in the future."

How large is the premium?

The table below compares the premium situation of some Bitcoin reserve companies. Strategy is the publicly traded company that holds the most Bitcoin globally and is also the most well-known representative in this field. Metaplanet is the most aggressive Bitcoin accumulator (its transparency advantages will be detailed later). Semler Scientific entered this trend relatively early, starting to purchase Bitcoin last year. Meanwhile, France's The Blockchain Group indicates that this trend is spreading from the United States to the rest of the world.

The NAV premium rate of some Bitcoin reserve companies (as of June 30; assuming a Bitcoin price of $107,000):

Although the premium rate of Strategy is relatively moderate (about 75%), the premium rates of smaller companies such as The Blockchain Group (217%) and Metaplanet (384%) are significantly higher. These valuations indicate that market pricing reflects not only the growth potential of Bitcoin itself but also a comprehensive consideration of capital market access, speculative space, and narrative value.

Bitcoin Yield: Key Indicators Behind the Premium

One of the key indicators driving the stock premium of these companies is the 'Bitcoin Yield'. This indicator measures the growth of the Bitcoin holdings per share of the company over a specific period, reflecting the efficiency of increasing Bitcoin holdings using fundraising capabilities without causing excessive equity dilution. Among them, Metaplanet is known for its transparency, and its official website provides [real-time Bitcoin data dashboard], dynamically updating Bitcoin positions, Bitcoin holdings per share, and Bitcoin yield.

Source: Metaplanet Analytics ()

Metaplanet has made its proof of reserves public, while other companies in the industry have yet to adopt this practice. For instance, Strategy has not implemented any on-chain verification mechanism to prove its Bitcoin holdings. At the "Bitcoin 2025" conference in Las Vegas, [Executive Chairman Michael Saylor explicitly opposed] public proof of reserves, stating that this move would become a "bad idea" due to security risks: "This would undermine the security of issuers, custodians, exchanges, and investors." This viewpoint is controversial, as on-chain proof of reserves only requires the public key or address to be disclosed, not private keys or signed data. Because Bitcoin's security model is based on the principle that "public keys can be safely shared," disclosing wallet addresses does not jeopardize asset security (this is a characteristic of the Bitcoin network). On-chain proof of reserves provides investors with a direct way to verify the authenticity of a company's Bitcoin holdings.

What will happen if the premium disappears?

The high valuation of Bitcoin reserve companies still exists in a bull market environment characterized by rising Bitcoin prices and high retail enthusiasm. No Bitcoin reserve company's stock price has ever remained below NAV for an extended period. The premise of this business model is the continued existence of a premium. As [VanEck analyst Matthew Sigel points out]: "When stock prices fall to NAV, equity dilution will no longer have strategic significance, but will turn into value extraction." This statement directly targets the core vulnerability of the model; the ATM stock issuance plan (the capital engine of these companies) essentially relies on stock price premiums. When the stock price exceeds the per-share Bitcoin value, equity fundraising can achieve an appreciation of the Bitcoin holdings per share; however, when the stock price falls near NAV, equity dilution will weaken rather than enhance shareholders' Bitcoin exposure.

This model relies on a self-reinforcing loop:

1. The premium of the stock price supports fundraising capability.
2. The funds raised will be used to increase holdings of Bitcoin
3. Bitcoin accumulation strengthens company narrative
4. Narrative value maintains stock price premium

If the premium disappears, the cycle will be broken: financing costs will rise, Bitcoin accumulation will slow down, and narrative value will weaken. Currently, Bitcoin reserve companies still enjoy advantages in capital market access and investor enthusiasm, but their future development will depend on financial discipline, transparency, and the ability to "increase the per-share Bitcoin holdings" (rather than simply piling up the total amount of Bitcoin). The "option value" that gives these stocks appeal in a bull market may quickly turn into a burden in a bear market.