Bitcoin Treasury Stocks Gain Traction Despite Criticism

Peter Schiff, a well-known gold advocate and long-time critic of Bitcoin, has expressed his disapproval of investing in Bitcoin treasury stocks. He described the practice as a "ridiculous" way to gain exposure to cryptocurrency. Schiff's stance is clear: if an investor wants to buy Bitcoin, they should do so directly, and if they want to invest in the stock market, they should choose companies with actual businesses.

Schiff's comments come as Bitcoin treasury companies gain traction. Recent launches include Twenty One Capital, backed by Tether, SoftBank, and Cantor Fitzgerald, which aims to become a leading corporate holder of Bitcoin. Additionally, Nakamoto Holdings, led by David Bailey, and Strive Asset Management, backed by Vivek Ramaswamy, have announced ventures focused on acquiring and managing Bitcoin at scale.

Supporters of Bitcoin treasury stocks argue that these investments offer a practical solution for investors facing regulatory barriers. For instance, direct exposure to Bitcoin is often not possible in retirement accounts, particularly in regions where Bitcoin ETFs are less accessible. Bitcoin treasury stocks provide an alternative way to gain exposure to digital gold while avoiding regulatory hurdles.

However, critics like pseudonymous investor Stack Hodler have warned against these companies, comparing them to "this cycle’s shitcoins." Hodler cautioned that some Bitcoin treasury companies create shares out of thin air to attract investors seeking outperformance, without offering any underlying utility.

Pierre Rochard, CEO of The Bitcoin Bond Company and former VP at Riot Platforms, defended the practice. He argued that Bitcoin-native firms could create genuine value for a range of market participants by tranching up Bitcoin’s risk-return profile. Rochard believes that financial engineering with securitization can create real value, catering to different investor preferences for volatility.