A treasury-focused Bitcoin stock rarely trades exactly at its intrinsic Bitcoin value. Shares oscillate between premiums and discounts relative to Net Asset Value (NAV). This page explains what NAV is, why premiums emerge, how they resolve, and how different investor archetypes can think about them.
The difference between a company's market cap and the net asset value (NAV) of its Bitcoin holdings.
Example: | If a treasury's Bitcoin is worth $100M but its market cap is $200M, the premium = 2× NAV.
The Bitcoin (and other liquid treasury assets) value attributable to shareholders. Commonly expressed as BTC per share and optionally in fiat terms (e.g. USD). Basic NAV uses current outstanding shares; fully diluted NAV assumes all in-the-money options/warrants convert.
The % difference between market capitalization (or share price) and NAV. Positive = premium (market paying above intrinsic Bitcoin value). Negative = discount (shares cheaper than underlying). Expressed as a ratio (e.g. 1.60×) or percentage (+60%).
Some investors cannot (or will not) self-custody BTC. A listed equity proxy offers familiar brokerage access, tax wrappers, or retirement accounts.
The treasury can accumulate more BTC over time (financed via equity, operations, mining, yield). Investors pay for future sats not yet on the balance sheet.
Equity markets enable margin, options, structured products, and intraday trading—features not always available (or desired) in direct BTC holding.
Passive mandates and thematic ETFs buy irrespective of premium, mechanically supporting price while flows are positive.
A limited number of credible, compliant, publicly traded pure-play BTC treasuries can create narrative scarcity and reflexive demand.
Management track record in treasury strategy (timing, financing, risk controls) earns a valuation overlay.
Premiums are dynamic. They expand when forward expectations outrun present holdings, and compress when reality (new BTC per share) catches up—or when growth credibility is questioned.
Initial listing / catalyst draws attention; premium forms quickly on future accumulation story.
Company executes financings or operating leverage; BTC per share growth validates narrative.
Either growth slows or NAV catches up. Premium ratio declines even if price is sideways.
Equilibrium (fair range) or over‑correction to discount; cycle can restart with new catalysts.
Example treasury showing how market cap and NAV move together in a consistent premium band
Treasury starting at 5× premium and compressing to ~2× as BTC accumulation catches up
Market sentiment driving Market Cap faster than NAV growth, expanding premium from 2× to 3.3×
A key concept (referenced on the KPIs page) is Months to Cover — the time it would take organic BTC accumulation to mathematically offset the extra value implied by the premium. Rapid BTC gain per share can justify a premium; slow growth makes elevated multiples fragile.
Suppose market cap is 1.60× basic NAV. If consistent net accumulation raises BTC holdings per share fast enough that NAV would have equaled today’s market value within, say, 6–9 months, investors may tolerate the premium. If Months to Cover stretches toward multiple years, repricing risk increases.
Prefers low or compressing premiums. Focus on downside limitation vs. BTC spot. Buys near fair value or discounts.
Accepts moderate premium if growth execution + financing path are credible. Monitors Months to Cover closely.
May embrace high premium anticipating reflexive expansion (momentum + capital markets access). Will rotate quickly on growth disappointments.
Scale in when premium normalizes toward historical mid or turns to a small discount.
Partial de-risking when premium exceeds prior cycle highs without proportional BTC/share acceleration.
Equity raises can be accretive (rapid BTC per share growth) or dilutive if proceeds idle—monitor post-raise pace.
If premium spikes while BTC lags, re-evaluate position sizing vs. simply holding spot.
Slower BTC accumulation than implied by premium narrative.
Equity / debt window closes; growth optionality repriced lower.
More public vehicles dilute narrative scarcity.
Tax, custody, or listing rule shifts reduce convenience advantage.
If a low-fee direct BTC wrapper satisfies access demand, structural premium narrows.
High-beta unwind leads momentum holders to exit simultaneously.
Premiums reflect a blend of structural access advantages and forward growth expectations. They are neither inherently good nor bad—only sustainable or fragile relative to execution speed. Track BTC gain, dilution mechanics, and Months to Cover to decide when you are being compensated for risk.
This material is educational only and not investment advice.