For a multitude of reasons, you could choose to invest in a Bitcoin Treasury Company rather than in real BTC. However, this could take more risks to your capital. Let us explore this reasoning in detail.
Should we find a stock market alternative to Bitcoin (BTC)?
With Bitcoin's democratization In the world of finance, there are more and more ways to expose themselves to the price of the BTC, without necessarily having it directly. The reasons for this can be multiple and thus meet several criteria such as:
- Lack of technical knowledge;
- Tax optimization;
- Simplify the guard of assets.
If the problem that diverts you from the purchase of real bitcoins is a lack of knowledge, we redirect you around 2 of our many guides, the first accompanying you to buy bitcoin, and the second, offering you an initiation to the use of a wallet.
On the taxation side for example, you could choose to expose yourself to Bitcoin in a diverted way, in particular through various assets eligible for an action savings plan (PEA) or a retirement savings plan (PER).
This can therefore include the purchase of ETF Bitcoin in the least risky cases, Or translate into investment in “Bitcoin Treasury Companies”. This is the latter point on which we will spend the most time, because the seeking alone of “advantageous taxation” can run risks on your capital much greater than the simple detention of BTC Spot.
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Mnav and real exhibition in Bitcoin
In finance, the concept of net asset value, or net asset value (NAV), makes it possible to connect the total assets of an investment product, subtract from its debts, all divided by the number of units in circulation. Compared to the price on the one hand on the market, this indicator then makes it possible to judge whether an asset is overvalued or undervalued.
👉 What are the main Bitcoin Treasury Companies
Based on this indicator, Strategy popularized the MNAV:
MNAV represents a multiple of the net asset value of Bitcoin, on the specified date, calculated as the value of the company divided by the valuable value of Bitcoin.
This therefore involves knowing several data:
- A = the price of the BTC;
- B = the number of BTCs held;
- C = the price of an action;
- D = The total number of actions diluted, all categories combined.
This then makes it possible to perform the following calculation:
MNAV calculation
The idea here is that the more this indicator is close to 1, The more it means that the purchase of an action amounts to buying BTC. An amount of less than 1 would mean that the company is undervalued compared to its bitcoin assets, while a higher value assumes that other factors that said assets make up the price.
This indicator is therefore relevant that in the case of a company that claims to be fully like Bitcoin Treasury Companysince if the calculation gives too much result, this will be a sign of an overvaluation of its price on the stock market.
For example, the MNAV of Strategy is 1.91, where that of Metaplanet is 7.51.
For Japanese society, such a value would not be disturbing if its activity was diversified beyond Bitcoin. The problem is that the company seems to have relayed its historic real estate activity in the background to mainly concentrate its marketing around Bitcoin, therefore suggesting a certain euphoria around action.
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An alternative indicator
While the MNAV can be complicated to calculate, in particular for the difficulty of finding the actual total number of all the actions diluted, all categories combined, we offer a simpler alternative: Divide BTC assets by market capitalization. This makes it possible to determine the share that Bitcoin represents in the capitalization.
With this model, we thus obtain the following results for some well -known examples:
- Strategy: 58.25 % of 106.95 billion dollars in capitalization;
- Mara: 99.85 % of $ 5.29 billion in capitalization;
- Metaplanet: 13.56 % of the $ 7.9 billion in capitalization;
- The Blockchain Group: 18.89 % of the 700 million euros in capitalization.
👨🏫 To read also-Is Bitcoin savings a better alternative to that in euros?
To get an idea of a possible overvaluation of the course of action, it is then enough to analyze the financial reports of the company, in order to determine whether its annex activity justifies the value of its capitalization excluding bitcoin. If you believe that this is not the case, investing in this company then amounts to buying BTC more expensive than its real price (with a premium), without its technical advantages.
Too much risks for too few advantages?
Recently, we came back in detail to the excesses to which companies could be subject with Bitcoin or Crypto cash. One point has been particularly highlighted: debt.
Besides, We can notice that it does not come into account in the calculation of the MNAVaccording to the method proposed by Strategy, while it is however an essential component in the concept of net asset value used in traditional finance.
Without repeating ourselves on this subject, we can still alert the reader wishing to buy the action of a Bitcoin Treasury Company on 3 points to pay attention. If they are combined, it can then be a real explosive cocktail:
- Aggressive marketing on the Bitcoin cash concept;
- A debt program (or actions) disproportionate compared to financial balance sheets;
- A small percentage of its bitcoin assets compared to its own capitalization.
Even without going so far as to talk about bankruptcy, the price fall that could happen in the event of Bear Market could be inversely proportional to current increases.
🔎 Is it too late to invest in Bitcoin?
Under these conditions, Buying BTC Spot appears to be wiseralso allowing to take advantage of an essential element that makes its strength: the fact of being truly owned by its capital.
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Investments in cryptocurrencies are risky. There is no guaranteed high yield, a product with high performance potential implies a high risk. This risk taking must be in line with your project, your investment horizon and your ability to lose part of this savings. Do not invest if you are not ready to lose all or part of your capital