Bitcoin treasury companies explained: mNAV, preferred stock and the Strategy playbook in 2026

Who this is for: Institutional allocators, equity analysts, founders considering a treasury pivot, and serious retail investors who want to read a treasury company’s filings, compute mNAV and bitcoin per share themselves, and tell a durable capital-raising franchise from a leveraged bet with overhead.

In August 2020 a mid-sized business intelligence software company called MicroStrategy announced it had bought $250 million of bitcoin as a treasury reserve asset. Six years later, renamed Strategy, it holds 848,000 bitcoin, about 4% of the 21 million that will ever exist, has issued five classes of perpetual preferred stock alongside six series of convertible notes, and has inspired nearly two hundred listed imitators holding bitcoin, ether, solana and other tokens. The bitcoin treasury company is now a recognised category of listed equity, and understanding how it works is necessary to understand a meaningful slice of both crypto demand and equity market volatility.

The model also changed character in 2025 and 2026. The first phase ran on a large premium to net asset value and near-zero-coupon convertible debt. The second phase runs on fixed-dividend preferred stock, a cash reserve to pay those dividends, and a management team that spends as much time defending the price of its preferreds as buying bitcoin. Smaller entrants that copied the first-phase playbook at the top of the cycle have mostly traded below the value of their coins in 2026, and the market has begun to sort survivors from the rest.

This guide explains the mechanism and the money flows, works through mNAV and dilution arithmetic on a real at-the-market raise from September 2026, covers the accounting and tax rules, the index inclusion debate, the ether and solana variants, and the failure modes, and ends with a checklist for underwriting any company that adopts the strategy. For the ETF alternative, see our guide to how spot bitcoin ETFs work; for how these companies reach the public markets in the first place, see crypto IPOs and SEC filings explained.

Bitcoin treasury companies by the numbers

The basic model: raise capital, buy bitcoin, repeat

The company holds bitcoin on its balance sheet and raises capital to buy more. Three funding channels do most of the work.

1. At-the-market (ATM) equity programs. The company registers a large shelf and sells new common shares into the market continuously through a broker. Strategy had $18.83 billion of remaining MSTR ATM capacity as of October 4, 2026, and had raised $17.06 billion through ATM sales across all classes in the first seven months of 2026, per its 8-K and Q2 results.
2. Convertible senior notes. Debt sold at very low or zero coupons because investors value the option to convert into a stock with bitcoin-like volatility. As of June 30, 2026 Strategy had six series outstanding totalling $6.71 billion: $1.01 billion of 0.625% notes due 2028, $1.5 billion of 0% notes due 2029, $800 million of 0.625% and $2.0 billion of 0% notes due 2030, $603.7 million of 0.875% notes due 2031, and $800 million of 2.25% notes due 2032, per its 10-Q.
3. Perpetual preferred stock. Since early 2025, fixed-dividend preferred shares sold to income investors have become the fastest-growing channel. Strategy’s five series carry stated dividend rates of 8.00% (STRK, convertible into common), 10.00% (STRF, STRD and the euro-denominated STRE) and a variable rate currently set at 12.00% (STRC). The aggregate carrying amount was $14.44 billion at June 30, 2026, and STRC alone raised $7.53 billion in the first seven months of 2026, per the 10-Q and Q2 results.

The proceeds buy bitcoin. If the raise was done at a premium to the value of the bitcoin backing each share, the bitcoin count per share rises, and the cycle repeats. Strategy calls bitcoin per share “BPS”, measures it in satoshis, and reports the percentage change over a period as “BTC Yield”. The 8-K for the week of October 1 to 4, 2026 is a typical instalment: 92,894 MSTR shares sold for $15.7 million, 334 BTC bought for $28.7 million at an average of $85,839, holdings up to 848,000.

Why a premium is the whole engine

Investors define mNAV as the company’s enterprise value divided by the market value of its bitcoin. A stricter version uses equity market capitalisation alone, which matters once debt and preferred stock become large. When mNAV is above one, the company can sell a dollar of stock and buy more than a dollar’s worth of bitcoin per existing share, which the industry calls accretive dilution. When mNAV falls to or below one, the trade stops working and the company is a leveraged bitcoin holder with corporate overhead and, increasingly, a dividend bill.

The arithmetic is unforgiving. In the week of September 21 to 27, 2026, Strategy sold 1,469,165 MSTR shares for $246.2 million net, about $167.58 per share, and bought 1,665 BTC at an average of $85,681. Using the 384.2 million basic shares disclosed in its July 2026 10-Q, each existing share was backed by roughly 220,200 satoshis, worth about $188.66 at that bitcoin price. Each new share brought in $167.58, enough to buy about 195,600 satoshis. New shares were therefore buying less bitcoin than they claimed, and bitcoin per share fell slightly. The worked example below runs the numbers.

Why investors pay the premium, and why it compressed

The premium has always been a combination of factors, not all of which survive scrutiny. Some investors are restricted from holding bitcoin or ETFs directly but can hold operating company stock. Some want leverage without margin: the debt is non-recourse to the shareholder, so the equity behaves like a call option on bitcoin. Some are paying for management’s ability to keep raising capital accretively. Much of the trading volume comes from convertible arbitrage funds and options traders who want the volatility itself, and Nasdaq 100 inclusion in December 2024 added index demand.

Two things eroded the premium through 2025 and 2026. The first is competition: spot bitcoin ETFs, which held 1.6 million BTC together with exchanges as of October 2, 2026 per BitcoinTreasuries.net, give institutions a cheaper, simpler way to hold the asset, and dozens of smaller treasury companies now compete for the same marginal dollar. The second is the shift in Strategy’s own capital structure. Each preferred series is a senior claim with a fixed cash cost. Strategy disclosed in June 2026 that annual preferred dividends and interest totalled about $1.76 billion, roughly 2.4% of the market value of its bitcoin at $85,800. A common shareholder is now buying bitcoin behind $6.7 billion of debt and more than $15 billion of preferred stock whose dividends must be paid in cash before anything accrues to the equity.

What BTC Yield does and does not tell you

BTC Yield is not a yield in the income sense. It is the percentage change in bitcoin per assumed diluted share, where the diluted count includes shares issuable on conversion of all convertible notes and convertible preferred stock plus outstanding options and restricted stock. It can fall even when the company is buying bitcoin, and it did in 2026. Strategy reported BTC Yield of 13.3% year to date on May 25, 2026, with 843,738 BTC held. On July 26, 2026 it held 843,775 BTC, essentially unchanged, yet reported BTC Yield of 4.5% year to date. In between, it raised $8.41 billion of gross ATM proceeds in the second quarter but spent the money on repurchasing $1.5 billion of 2029 convertible notes for $1.38 billion, building the USD Reserve from $871 million to $3.75 billion, buying back STRC, and paying $400.7 million of preferred dividends in the quarter. Shares went up, bitcoin did not, and bitcoin per share came down.

That episode is the clearest illustration of the second-phase model: equity issued below equity-basis mNAV to defend the credit stack rather than to accumulate bitcoin.

The preferred stock era: STRK, STRF, STRD, STRC and STRE

Strategy’s preferred series are the most consequential innovation in the category since the first convertible. Each is perpetual, sits ahead of common equity and behind the convertible notes, and pays a cumulative or non-cumulative dividend set at issue. STRK, launched in early 2025, pays 8.00% and converts into MSTR at a high strike. STRF (10.00%, cumulative) followed in March 2025 and STRD (10.00%, non-cumulative) in June 2025. STRC, the “Stretch” preferred launched in July 2025, has a variable dividend reset monthly by the board with the stated aim of keeping the stock trading near its $100 par. STRE, a euro-denominated 10.00% preferred, was added for European investors in late 2025. As of October 4, 2026, Strategy had $17.51 billion of STRC ATM capacity remaining, versus $1.62 billion for STRF, $2.10 billion for STRK and $4.01 billion for STRD, which shows where management expects demand.

Sources: Strategy 10-Q for the quarter ended June 30, 2026; Strategy 8-Ks dated October 1 and October 5, 2026.

The Digital Credit Capital Framework

On June 29, 2026 Strategy published a five-part framework that formalised the second-phase model. The USD Reserve, $2.55 billion at the time and $4.88 billion by October 4, 2026, may be used only to pay preferred dividends and interest, and the board set a floor of at least 12 months of expected payments. The STRC dividend was raised to 12.00% effective July 1, 2026, with a stated objective that STRC trade between roughly $99 and $100. The board authorised $1.0 billion of repurchases of the four US preferred series and a separate $1.0 billion of MSTR common repurchases. And a BTC Monetization Program allows the company to sell bitcoin to raise up to $1.25 billion for the USD Reserve or to fund dividends and buybacks, while stating that it is not obliged to sell any.

The repurchases started immediately. Between July 20 and 26, 2026 Strategy bought 288,930 STRC shares for $25.0 million, an average of $86.53 or a 13.47% discount to par. By late September the discount had closed: 1,033,168 shares were repurchased for $102.6 million between September 28 and 30 and a further 740,634 for $73.7 million between October 1 and 4, both at roughly $99.3 to $99.5 per share, per the October 5, 2026 8-K. The company’s policy is to be a regular buyer below $100 and never to issue below $100, which turns STRC into something close to a managed-rate floating instrument backed by bitcoin and defended with common equity sales.

The USD Reserve is a drawdown asset. In the week of September 28 to October 4, 2026, $142.5 million left it for dividends and interest and the balance fell from $5.02 billion to $4.88 billion. At the June 2026 run rate of $1.76 billion a year that is about 33 months of cover, well above the policy floor, but only equity sales or bitcoin sales refill it.

Accounting and tax: ASU 2023-08 and the CAMT question

Under the old intangible-asset rules, bitcoin could only be written down, never up, which produced misleading losses and no recognition of gains until sale. FASB’s ASU 2023-08, issued in December 2023, requires crypto assets within its scope to be measured at fair value each reporting period with changes recognised in net income, effective for fiscal years beginning after December 15, 2024, with early adoption permitted. Strategy adopted it from January 1, 2025.

The effect is that reported earnings now track bitcoin. For the quarter ended June 30, 2026 Strategy reported an operating loss of $8.33 billion, an unrealized loss on digital assets of $8.32 billion, a net loss of $8.22 billion, or $24.45 per diluted share, on revenue of $122.4 million from the software business. Its digital assets were carried at $49.67 billion at June 30, 2026, against a cost basis of $63.69 billion at the end of July, because bitcoin traded near $65,000 that summer. The deferred tax liability tied to unrealized gains fell from $1.93 billion at December 31, 2025 to about $1.4 million at June 30, 2026. The same mechanism will produce a large reported gain in the third quarter of 2026 if bitcoin holds the mid-$80,000s where Strategy was buying in late September and early October.

Fair value accounting also raised a tax issue. The US corporate alternative minimum tax applies a 15% rate to adjusted financial statement income for very large companies, and because unrealized bitcoin gains now sit in book income, the largest holders faced the possibility of a cash tax on gains they had not realised. Strategy and others lobbied on the point through 2025, and Treasury and IRS interim guidance in late 2025 indicated that unrealized gains and losses on digital assets could be excluded from the computation pending final regulations. Readers should check the final rules; our guide to US crypto tax rules covers the broader framework.

A second tax feature matters for preferred investors. Strategy stated in its Q2 2026 results that it expects preferred distributions to be treated as non-taxable returns of capital “for the foreseeable future (i.e., ten years or more)”, and its October 1, 2026 8-K repeated that for the October 31 and November 15 STRC dividends. The holder’s basis falls instead of current income arising, which is part of why a 12.00% headline rate has found buyers.

Index inclusion: Nasdaq 100 yes, S&P 500 and MSCI contested

Index membership is a hidden source of demand, and it became a live debate in 2025 and 2026. Strategy joined the Nasdaq 100 in December 2024. S&P 500 eligibility requires, among other things, positive GAAP earnings over the trailing four quarters; Strategy met that test after the first fair value gains of 2025 but was not added at the quarterly rebalances, and the $8.22 billion second-quarter 2026 loss means the test fails again until enough quarters of gains accumulate. Membership would be worth billions in forced buying, which is why every rebalance announcement moves the stock.

MSCI opened the more consequential debate in October 2025, consulting on whether companies whose digital asset holdings make up 50% or more of total assets should be treated as investment vehicles and excluded from its Global Investable Market Indexes. Exclusion would have forced passive selling of Strategy and smaller treasury companies by every fund benchmarked to MSCI, and sell-side estimates of the potential outflow ran into the billions. MSCI announced in January 2026 that it would not proceed with the exclusion at that time while continuing to review the treatment of such companies. The question is not closed: index providers do not want to hold leveraged bitcoin funds in equity benchmarks, and a company whose software business is a rounding error against its bitcoin is hard to classify.

The imitators: bitcoin, ether and solana treasuries

Public companies held 1,279,033 BTC across 197 names as of October 2, 2026, worth about $110 billion at $86,279, according to BitcoinTreasuries.net. Strategy accounts for about two thirds of that total. The next tier is Metaplanet in Japan with 44,000 BTC, Twenty One Capital (Nasdaq: XXI) with 43,514, the miner MARA Holdings with 35,577, Bitcoin Standard Treasury Company with 30,021 and Strive with 29,462. Bullish, SpaceX, Coinbase, Trump Media and Tesla follow, though several of those are operating companies that happen to hold bitcoin rather than treasury companies in the strict sense.

Sources: BitcoinTreasuries.net, October 2, 2026; Strategy 8-K, October 5, 2026; Forward Industries 8-K, September 15, 2026; Metaplanet disclosures, October 5, 2026; SEC filings for the Strive and Semler merger, September 2025.

Proof-of-stake variants

Ether and solana treasury companies added a twist the bitcoin version cannot: the tokens can be staked inside the company for a native yield, a second number to report alongside token per share. BitMine Immersion, which describes its mission as maximising ETH per share through treasury management and protocol participation, became the largest corporate ether holder in 2025; SharpLink Gaming made the same pivot, and Forward Industries, Upexi and DeFi Development Corp did it with solana. Staking adds a few percent of token growth a year but does not change the mNAV arithmetic: a company trading at 0.7 times its token value still cannot issue stock accretively. Our guides to crypto staking and Solana explain the underlying mechanics.

Consolidation and failures in 2026

The 2025 wave followed a pattern: a small listed company, a private placement led by crypto funds, a pivot announcement, and a stock that spiked and then drifted below the value of its coins. 2026 is when the sorting started.

• Buybacks and preferred repurchases. Strategy’s $1.0 billion digital credit repurchase authorisation and $1.0 billion common repurchase authorisation from June 2026 set the template; Metaplanet’s October 1, 2026 notice on the status of its share repurchases shows the same tool at a Japanese listing.
• Mergers. Strive and Semler Scientific agreed in September 2025 to combine two sub-scale bitcoin balance sheets. In September 2026 Forward Industries, the largest solana treasury, made an unsolicited all-stock proposal for SkyAI at 0.306 Forward shares per SkyAI share, a 50% premium to SkyAI’s $1.42 close on September 14, 2026, with a September 25 deadline for the target’s board. A company trading at a discount to its coins is a cheaper way to buy coins than the open market.
• Forced sales and exits. CCS has covered the casualty list: Genius Group sold all of its bitcoin to pay down debt, KULR Technology abandoned the treasury playbook after a $22 million loss, Empery Digital sold 1,635 BTC as its buffer shrank, and GD Culture Group diluted shareholders 18-fold to survive a $212 million loss without selling its 7,500 BTC.
• Liquidity demonstrations. Metaplanet’s October 5, 2026 purchase notice was explicitly titled as including a sale and reacquisition of bitcoin to demonstrate liquidity, a sign that investors now ask whether a treasury company can actually sell if it has to.

How we got here: a timeline

Worked example: mNAV, BTC Yield and dilution on a real ATM raise

How to evaluate a treasury company: a checklist

• What is bitcoin (or token) per share, and which way is it moving? Compute it yourself from the latest 8-K holdings and the 10-Q share count, then compare it to the company’s own BTC Yield. A gap usually means the company is using a diluted denominator or counting something other than coins.
• What is mNAV on both bases? Equity-basis mNAV below one means common issuance is dilutive to coins per share; enterprise-value mNAV above one with equity-basis below one, as in Strategy’s September 2026 raise, means the premium now sits in the credit stack rather than the common.
• Were recent raises done above or below breakeven? Divide the net proceeds by shares sold to get the realised price and compare it to the bitcoin value per share on the same day. A company that keeps issuing below breakeven is funding something other than accretion.
• What is the fixed-charge burden and how is it covered? Add annual preferred dividends and interest and compare them to cash reserves and to the market value of holdings. Strategy’s $1.76 billion a year against a $4.88 billion reserve is 33 months of cover; many smaller companies have no reserve policy at all.
• What is the debt maturity schedule? Convertibles must be refinanced, converted or repaid. Note each series’ conversion price relative to the stock, and whether the company has bought back notes at a discount, as Strategy did with $1.5 billion of 2029 notes in May 2026.
• How senior is the preferred and what does it cost? A 10% to 12% perpetual dividend is a permanent claim on cash. Check whether dividends are cumulative, whether the company has a stated price target for the preferred, and whether it is repurchasing or issuing.
• Who custodies the coins and can the company prove liquidity? Metaplanet’s October 2026 sale-and-reacquisition disclosure exists because investors asked. See our guide to crypto custody.
• How liquid is the stock? The whole model depends on selling shares in size without moving the price. Average daily dollar volume relative to the size of the ATM program is the number to check.
• Is there an operating business, and does it matter? Strategy’s software unit produced $122.4 million of revenue in Q2 2026 against $8.3 billion of bitcoin marks. For index providers and tax authorities the answer to “is this an operating company” is now the key classification question.

Risks and open questions

Leverage and refinancing. Convertible notes have to be refinanced or repaid; if bitcoin falls far enough for long enough, a company that cannot raise equity at a premium has to sell bitcoin, fund coupons and dividends from reserves or a shrinking business, or restructure. Strategy’s debt is modest relative to holdings, around 9% of bitcoin value at $85,800, but its preferred dividends are a larger and permanent cash call, and smaller imitators with thinner balance sheets, less liquid stocks and no operating business are far more exposed. 2025 and 2026 produced a wave of newly announced treasury companies whose mNAV collapsed below one within months, and several have already sold coins or exited.

Reflexivity. The model works because a premium funds accretion which justifies the premium. In reverse, a discount prevents accretion, which deepens the discount, which forces the company to defend its credit instruments with dilutive equity, which lowers bitcoin per share further. Strategy’s 2026 experience, BTC Yield falling from 13.3% to 4.5% year to date between May and July while holdings barely changed, is a mild version of this loop. The open question is whether a preferred franchise with a stable $99 to $100 trading range can be built and maintained without that cost to the common.

Accounting and tax volatility. Fair value accounting makes reported earnings a function of the bitcoin price, which complicates index eligibility tests built for operating companies and, until the CAMT rules are final, leaves a residual question about tax on unrealised gains. The return-of-capital treatment of preferred dividends depends on the company continuing to have no earnings and profits, which is itself a function of bitcoin’s price path.

Concentration. Public companies hold about 6.1% of all bitcoin and Strategy alone about 4.0%, per BitcoinTreasuries.net as of October 2, 2026. Their buying supported the price in 2024 and 2025; a forced seller of that size would do the reverse, and the BTC Monetization Program means the largest holder has formally reserved the right to sell. Track corporate holdings alongside our ETF tracker and guide to reading on-chain data.

What to watch next

Glossary

Bitcoin treasury company

A listed company that holds bitcoin as its primary reserve asset and raises capital from public markets to buy more, in the purest cases with little or no operating business.

mNAV

Multiple of net asset value. Enterprise value (or, in the equity-basis version, market capitalisation) divided by the market value of the company’s bitcoin. Above one is a premium, below one a discount.

BPS and BTC Yield

Bitcoin per share, measured in satoshis, and its percentage change over a period using assumed diluted shares. Strategy’s metrics for whether capital raising is accretive.

Accretive dilution

Issuing new shares at a price high enough that the bitcoin bought per new share exceeds the bitcoin per existing share, so bitcoin per share rises despite more shares.

At-the-market (ATM) program

A registered program under which a company sells new shares into the open market over time through a broker rather than in a single underwritten offering.

Convertible senior note

Debt that the holder can exchange for a fixed number of shares. Treasury companies issue them at low or zero coupons because the conversion option on a volatile stock is valuable.

Perpetual preferred stock

Equity with a fixed stated amount and dividend, no maturity, ranking ahead of common stock and behind debt. STRK, STRF, STRD, STRC and STRE are Strategy’s series.

USD Reserve

Strategy’s segregated cash pool, $4.88 billion as of October 4, 2026, that may be used only to pay preferred dividends and interest, with a policy floor of 12 months of payments.

ASU 2023-08

The FASB standard requiring crypto assets to be measured at fair value with changes in net income, effective for fiscal years beginning after December 15, 2024.

CAMT

The US corporate alternative minimum tax, 15% of adjusted financial statement income for very large companies, which raised the question of taxing unrealized bitcoin gains.

Return of capital

A distribution not paid out of earnings and profits for tax purposes, which reduces the holder’s cost basis instead of being taxed as current income.

Digital asset treasury company (DATCO)

The index-industry term for any listed company whose balance sheet is dominated by crypto assets, used in MSCI’s 2025 consultation.

Why it matters

The bitcoin treasury company began as a corporate finance curiosity and became one of the largest sources of structural bitcoin demand, a new class of yield instrument for income investors, and a test case for how accounting standards, tax codes and index methodologies handle a company that is mostly a pile of a volatile asset. Its 2026 phase, with Strategy issuing common equity below equity-basis mNAV to defend a 12.00% preferred and build a dividend reserve, is a different business from the 2021 or 2024 version, and it deserves to be analysed as one.

The lesson of 2026 is that the model is a financial product wearing an operating company’s clothes. When the premium is there, it compounds bitcoin per share faster than anything else in public markets. When it is not, the same machinery dilutes shareholders to service senior claims, and the weakest entrants sell coins or disappear. Underwrite it as a leveraged closed-end fund with a fee paid in dilution, and ask every quarter which way bitcoin per share is moving and why.

Sources

1. SEC EDGAR: Strategy Inc Form 8-K, bitcoin holdings, ATM sales and STRC repurchases for October 1 to 4, 2026, October 5, 2026
2. SEC EDGAR: Strategy Inc Form 8-K, bitcoin purchases and ATM sales for September 21 to 27, 2026, September 28, 2026
3. SEC EDGAR: Strategy Inc Form 8-K, STRC dividend rate maintained at 12.00% and return of capital characterisation, October 1, 2026
4. SEC EDGAR: Strategy Inc Form 10-Q for the quarter ended June 30, 2026, August 3, 2026
5. Strategy: Strategy Announces Second Quarter 2026 Financial Results, July 30, 2026
6. Strategy: Strategy Initiates STRC Repurchases and Announces Ongoing Buyback Policy, July 27, 2026
7. Strategy: Strategy Announces Digital Credit Capital Framework, USD Reserve Policy, STRC Dividend Policy, Repurchase Authorizations and BTC Monetization Program, June 29, 2026
8. Strategy: Strategy Completes $1.5 Billion Debt Repurchase and Achieves BTC Yield of 13.3% YTD; Now Holds 843,738 BTC, May 26, 2026
9. SEC EDGAR: Forward Industries press release, proposal to acquire SkyAI, Inc., September 15, 2026
10. BitcoinTreasuries.net: Public company, ETF and government bitcoin holdings, October 2, 2026
11. Metaplanet: Investor relations disclosures, including October 5, 2026 notices on capital allocation, bitcoin purchases and the Net Interest Income Strategy, October 5, 2026
12. Strategy: Bitcoin holdings and digital credit dashboard, October 6, 2026

Disclosure: This guide is for education only and is not investment, legal or tax advice.