Crypto treasury companies are booming.
More than 200 public companies now hold Bitcoin or Ethereum on their balance sheets, with dozens more launching weekly. From US President Donald Trump to an online casino marketing company, firms are beefing up their balance sheets by holding crypto as a reserve.
To some, these so-called Digital Asset Treasuries are no more than overleveraged crypto plays wearing corporate suits.
But for Tom Lee, Wall Street strategist and crypto bulwark, there’s more than meets the eye.
There are five distinct advantages to a crypto treasury company, Lee said in an interview with investment firm Pantera Capital, although it all comes down to a sixth: “management.”
Here are the six advantages to launching a crypto treasury company, according to Lee.
Capital markets
For Lee, capital markets are the first driver.
When a company’s stock trades above the value of its crypto holdings, it can issue new shares and use the proceeds to buy more tokens — effectively growing its assets without raising debt or diluting per-share value.
“They’re actually growing your holdings by selling stock,” said Lee. It’s “a really strange concept, it’s accretion.”
So, if investors are willing to overpay for a company’s crypto exposure, the company can keep stacking at a discount.
Cost of money
The fact that an exchange-traded fund holder has a cost of money is the second driver, according to Lee.
That’s because when a retail investor wants to borrow money for a crypto position, they face interest rates of up to 10%.
But corporations have access to far cheaper capital — and nifty financial instruments like bonds or derivatives to drive those costs down even further.
“MicroStrategy is borrowing money at 0%,” said Lee.
It’s like taking out a zero-interest loan and earning yield on the borrowed funds.
Strategy now holds upwards of $73 billion in Bitcoin.
The third advantage is that a public company can issue equity, said Lee, and use that equity as a strategic asset.
“One trades at net asset value, the other at a premium. The premium company can acquire the other using its stock, and suddenly grow its ETH per share again.”
In other words, when a company’s shares are trading well above the value of its crypto holdings, those shares can become a powerful acquisition tool.
Companies scoop up cheaper rivals, increase their onchain reserves, and drive more value to shareholders, all without spending a dime in cash.
Another major advantage of crypto treasury companies, especially those focused on Ethereum, is that they’re not limited to passively holding coins — they can build real businesses around their holdings.
“They can actually build an operating company that grows the ETH per share,” Lee said.
That means an Ethereum treasury firm could develop products, infrastructure, or services directly within the Ethereum ecosystem.
All of this activity can generate revenue or earn more ETH, compounding the company’s onchain exposure and potentially boosting shareholder returns.
Onchain yield
Ethereum-based firms can stake their ETH and earn yield on top of capital appreciation — a dynamic that simply doesn’t exist for most Bitcoin treasury companies.
“This is something unique to the non-Bitcoin treasuries,” said Cosmo Jiang, portfolio manager at Pantera Capital. “It’s a structural advantage.”
Jeff Park, head of Alpha Strategies at Bitwise, has also highlighted yield as Ethereum’s unique value proposition for a corporate treasury play.
“Ethereum is a useful asset,” Park said in a July 8 interview on the Wolf of All Streets podcast.
“Bitcoin stores value. But Ethereum is productive — it earns yield.”
The story
But the biggest factor? The narrative.
“It all comes down to whether the market believes the story,” said Lee.
For investors to buy in, the managing team needs to have a clear vision on how to achieve the previous five factors, according to Lee.
“That’s why Metaplanet trades where it does.”
Metaplanet is a former budget hotel operator from Japan that has become one of the most aggressive Bitcoin treasury firms. Since 2024, when it pivoted, the company’s market capitalisation has gone to about $6 billion from $13 million.
Bitcoin trades at around $119,142.
