💣 Big boom theory

The corporate BTC trade is less about “buy coin, hope number go up” and more about maximizing one thing: BTC per share.

On today’s Supply Shock, Tim Kotzman from the Bitcoin Treasuries podcast spells out the Strategy template: preferreds, buybacks and MNAV (multiple of bitcoin NAV) guardrails.

As you might expect, this episode of Supply Shock gets into the nitty gritty of how bitcoin treasury companies are valued. Which, for better or worse, can get quite technical. 

Luckily, Kotzman is an expert.

“[Strategy has] launched these preferred products where [it] can literally step on these different pedals, sell a preferred product and buy back a common share equity and really use these different levers to increase bitcoin per share, whether that is buying bitcoin or buying back shares,” Kotzman told host Pete Rizzo.

“And nowhere in there is the selling of bitcoin.” 

The mandate holds even when the spot market wobbles. “If the price of bitcoin goes down and you have a company like Strategy that has this financial engineering in place, [it] can buy back shares, [it] can really engineer keeping a steady or increasing bitcoin per share.”

Valuation language is coalescing around MNAV (with “forward MNAV” in the mix), but precision is premature. “I guess I’d say it’s more art than science at this point,” Kotzman said.

Tim also pushed back on what he considers selective outrage suggesting that Strategy stock is especially overvalued: “How is Home Depot or XYZ company trading at like a 50x MNAV, but someone’s saying that, ‘You know, everything’s going to crash and burn when something’s at a 2x or 3x MNAV?’”

Kotzman sees even more entrants before year end. “My individual base case is that we’ll see an expansion of these companies through the end of the year. We’ll have a great 2026…”

And the shock headline he thinks could sneak up on people: “you know, getting to 4% of the bitcoin supply or having one million BTC in one public entity…” 

Until then, expect noise. “I think it’s going to be a lot of noise, a little bit of signal and a lot to really cover.”

Full episode on YouTube, Spotify, Apple Podcasts, and X.

This newsletter was created with assistance from AI tooling.

• BTC/USD set a new all-time high overnight of $124,533 on Coinbase. That was before Treasury Secretary Scott Bessent told Fox Business that the US bitcoin reserve would not be buying any coins, instead relying only on coins confiscated in criminal cases. BTC is now finding support just below $118,000.

• Japan’s MetaPlanet has published its own framework for preferred shares moving forward. Current BTC holdings: 18,113 BTC ($2.2 billion).

• Not oranges to oranges, but still fun: After flipping Amazon, bitcoin is now neck-and-neck with Alphabet for the rank of fifth-largest asset by market cap.