Crypto on the balance sheet
Analysing treasury stocks
A company with a large coin position is not valued with a normal P/E: earnings say little and the balance sheet says everything.
Step 1: net asset value per share
Coins held times price, plus other assets, minus debt, divided by fully diluted shares.
Compare with the market price to see the premium or discount.
Coins per share is the key metric, not the headline position.
Step 2: how purchases are funded
Free cash flow is safest; convertibles add a repayment date that may land in a bear market.
Issuing shares above NAV adds coins per share; below NAV it destroys them.
Check maturities, conversion prices and any collateralised debt.
Step 3: the business behind it
A profitable operating business can sit out a drawdown; a loss-making one must sell coins.
Consistent quarterly disclosure of coin counts and average cost is a quality signal.
Watch key-person risk when one executive embodies the strategy.
Frequently asked questions
What is mNAV?
Market value divided by net asset value; above 1 is a premium.
Is a premium bad?
Only if unexplained by funding advantage or operating profit.
Why not buy the coin?
Often simpler; the share only adds value with cheaper funding.
Read next
Bitcoin on the balance sheet
More listed companies hold bitcoin as a reserve. The motives, the practical setup and where it goes wrong.
Crypto in the annual report
How bitcoin appears in financial statements: intangible asset or fair value, what flows through profit and loss, and which notes to read.
Treasury risks
Where treasury strategies break: maturities, collateral calls, forced selling and boards that lean on one person.