When Michael Saylor bet his company's entire treasury on Bitcoin in 2020, Wall Street thought he'd lost his mind.
6 years later, Strategy Inc. (the company formerly known as MicroStrategy) holds over 400,000 Bitcoin worth roughly $40 billion, and Saylor at times, looks like a genius.
At other times, especially recently, he looks downright foolish.
And his possible brilliance still doesn't make Strategy stock a smart way to own Bitcoin.
Now I've held Bitcoin for coming up on 9 years, and I haven’t sold even 0.000001BTC in that time.
Long term I think we're heading to $200K+
But I'm not buying Strategy or any of the 150+ "Bitcoin treasury companies" that have copied Saylor's playbook.
Here's why…
Right now, Strategy shares trade at about 10-17% below the value of the Bitcoin they actually hold (this "net asset value" discount fluctuates daily).
For most of the the past 4 years, the stock has traded at a massive premium, meaning you'd pay $1.20 or $1.50 for every dollar of Bitcoin on their balance sheet.
Think about how silly that is.
Bitcoin could rally 50% and you could still lose money on Strategy if the discount deepens.
But the premium/discount problem is just the start…
When you buy Strategy, you don't own Bitcoin. You own shares in a company that owns Bitcoin.
You have zero claim on those coins. You're exposed to corporate governance risks, management decisions, operational problems… none of which have anything to do with Bitcoin itself.
Strategy also carries $6-8 billion in debt (mostly convertible notes) to leverage up their Bitcoin position.
Now they claim they can handle Bitcoin dropping to $8,000 because their debt matures gradually through 2032 and they've got cash cushion.
Maybe. But leverage cuts both ways.
If Bitcoin crashes and credit markets seize up, Strategy shareholders eat the downside volatility while management scrambles to refinance.
And when you want out? You can't convert your shares into Bitcoin.
So you’ll need to sell the stock, possibly at an even worse discount during a market panic.
Compare that to just buying Bitcoin.
You get clean, direct exposure to the price. Transparent, minimal fees. Easy to buy and sell.
Or buy a spot Bitcoin ETF like BlackRock's IBIT. You get regulated custody, institutional-grade security, and pure Bitcoin exposure in a brokerage account.
No premium/discount swings. No corporate drama. No leverage risk. No complexity.
Just Bitcoin.
I get the appeal of Strategy.
Saylor's a compelling guy and the leveraged Bitcoin bet feels exciting.
Plus for a longer time it was the easiest way to “buy Bitcoin” in a retirement friendly account.
But you're taking on extra risk and extra cost for worse Bitcoin exposure… especially now that the stock trades below the value of its holdings and that leverage amplifies volatility without guaranteeing you capture Bitcoin's upside.
The same goes for every other Bitcoin treasury company out there. They're inefficient, risky wrappers around an asset you can just buy directly.
(The less said about ETH treasury companies, the better)
So back in 2024 when Ivy was born, I thought a lot about how to build wealth that lasts.
And while I don’t claim to have it all figured out… I know for sure that the answer isn't complicated financial engineering.
It's owning great assets directly, with as little friction as possible.
If you want Bitcoin, buy Bitcoin. If you want it in a regulated wrapper, buy a spot ETF.
Don't pay premiums or accept discounts and take on unnecessary corporate risk just because a company has Bitcoin on their balance sheet.
The best investments are usually the simplest ones.
If you want to understand why Bitcoin matters and how to invest in it properly, check out…
Oliver