What is the structure of the elastic Bitcoin Treasury Company (RBTC)

Author: Andrej Antonijevic, Source: Bitcoin Treasury, Compiled by: Shaw Bitchain Vision

summary

This article introduces the “Elastic Bitcoin Treasury Company” (RBTC), an enterprise model designed to accumulate Bitcoin and minimize the risk of permanent capital loss.Based on the risk efficiency ladder of financial instruments and the risk-reward spectrum of corporate strategies, RBTC is equity-led, has flexibility and has the option to provide regular returns.Compared to its peers, it represents a low-risk anchor: a stable, innovative tool for long-term Bitcoin accumulation and earnings creation.

Introduction

Most Bitcoin treasury reserve companies today aim to accumulate as much bitcoin as possible and create Bitcoin earnings through financial tools that can generate value-added.This model should be combined with corporate resilience.A Bitcoin treasury reserve company must be able to survive a Bitcoin decline, manage its financing portfolio responsibly, and, if it wants to expand its business, it must provide reliable revenue throughout the process.

This article introduces the risk-efficiency ladder of financial instruments used to generate Bitcoin returns, the risk-reward spectrum of Bitcoin Treasury companies’ corporate strategy, and proposes the concept of Resilient Bitcoin Treasury Company (RBTC): a structure designed to accumulate Bitcoin in a value-added manner while minimizing the risk of permanent capital losses and opening up participation to a wider investor community.

The risk efficiency ladder of financial instruments

We first introduce the risk efficiency ladder of the four major financial instruments used by Bitcoin Treasury Reserves Corporation to purchase Bitcoin: common stock, convertible bonds, term debt and permanent preferred stock.

The x-axis represents issuance efficiency, which measures the potential for returns and Bitcoin earnings.Efficiency is defined as the percentage of newly acquired Bitcoins that are diluted by new financing to existing shareholders.

In a previous article, we introduced the formula for efficiency:

Efficiency = BTC rate of return (%) ÷ BTC purchases increase (%)

Efficiency measures how much revenue per share of Bitcoin increases when a company raises funds to buy more Bitcoin.

We also list the efficiency estimated by tool category, summarized as follows:

The y-axis shows the independent risks of each tool.Risk is defined as the risk of permanent loss of capital under long-term adverse conditions.In other words, if the price of Bitcoin is long sluggish, or if the stock is long traded at a discount (greater than the acceptable threshold defined in previous articles), how long does it take for a company to go bankrupt or run out of liquidity.The longer a company survives under such conditions, the lower the risk, and vice versa.

Example:

• In equity-only mode, bankruptcy takes relatively long.Without repaying coupons or principal, companies may be stuck with weak Bitcoin prices but will not be forced to go bankrupt.Of course, operating costs are still important because it determines how long a company can continue to operate.

• By contrast, regular debts must pay relatively high coupons and ultimately need to repay the principal.If the price of Bitcoin falls when it expires, the debt must be paid by issuing shares, which in turn is below the acceptable threshold for the instrument (as defined above), which will result in permanent capital loss.

The following figure shows the risk efficiency ladder of four tools:

The above analysis is based on the perspective of a single independent tool.Since Bitcoin Treasury Reserve companies typically employ multiple financing tools, we extend this framework to a corporate strategic risk-reward spectrum.Before this, we first introduce a company design dedicated to maintaining resilience under market conditions: Resilient Bitcoin Treasury Company (RBTC).

Elastic Bitcoin Treasury Company (RBTC)

Bitcoin itself is a volatile asset, and high retracement is not uncommon.Most Bitcoin treasury reserve companies acknowledge this reality and build an operating structure long enough to benefit from Bitcoin’s long-term expected performance.But they achieve this in different ways.

Elastic Bitcoin Treasury Company (RBTC)Designed to minimize the risk of permanent capital losses.Its main features are as follows:

• Pure equity financing.RBTC does not use term debt, convertible bonds or permanent preferred shares.Since there is no coupon or due, there is no external debt that could lead to bankruptcy.Operating costs remain, but these costs are within controllable range and are applicable to any structure.This makes RBTC the lowest risk form of holding Bitcoin.

• Bilateral capital strategy: Willing to sell Bitcoin to make up for the discount.As mentioned earlier, rigid remarks like “never sell Bitcoin” can bring risks in themselves.RBTC follows a two-way principle: when its stock trading price is higher than its net asset value, it issues shares to buy Bitcoin; when its stock trading price is lower than its net asset value, it is willing to sell Bitcoin and buy back the shares with the funds it has earned.Both of these situations will lead to an increase in the price of Bitcoin per share, and the yield on Bitcoin is two-way.Crucially, this mechanism has nothing to do with the price of Bitcoin.Whether the price of Bitcoin is sluggish (selling Bitcoin at a trough to fund repos) or rising (issuing at a premium to buy more Bitcoin), the premium/discount relationship itself drives value-added.

• The lowest risk of permanent loss.Without external financing obligations, RBTC can withstand the test of a long-term bear market.The pros and cons are obvious: Compared with debt-based strategies, their efficiency and return potential are lower, but the risk of permanent capital loss or complete bankruptcy is significantly reduced.

• Focus on sustainable accumulation.RBTC recognizes that the real advantage lies in holding accumulated Bitcoin assets for a long time.High leverage and high-yield strategies may seem attractive, but the results are often two-way: either amplify returns or force investors to repay or dilute assets at a severe discount, resulting in permanent capital losses.RBTC will sacrifice some profit efficiency to maximize the probability of success, thus maximizing participation in Bitcoin’s long-term appreciation.

Increase regular income tier

The stock market distinguishes growth stocks from earning stocks.So far, Bitcoin Treasury Reserves has only played a growth role.But adding rules-based earnings policies can reduce the risk of investor experience and expand the investor base.

Traditional Bitcoin reserve companies often rely on outside investors in convertible bonds, perpetual bonds or term debts to pay them coupons to obtain financing.RBTC internalizes this logic: instead of paying interest to external investors, it returns part of the Bitcoin earnings directly to shareholders.

The dividend structure consists of three elements:

• First, the compound track: No fees will be paid in the first 4 years.

• Distribution rhythm: Distribute a portion of BTC income every 2 years (for example 20%).

• Dividend payment form: Filipino dividend (selling BTC, converting to fiat currency on record date and distributed in cash) or stock dividend (issuing new shares equivalent to the distributed value, diluting part of BTC earnings, but providing revenue without BTC sales).

This policy is closely related to investors.Investors currently buying preferred shares of Bitcoin Treasury companies may accept a face rate of 7%-8%.They may be more inclined to a structure that can both obtain 20% of Bitcoin’s earnings share, and participate in the long-term price increase of Bitcoin, and achieve this through low-risk pure equity investment tools.

One might think that for Bitcoin treasury companies that currently do not pay dividends, investors can “create” gains by selling some of their equity.But in reality, this is not the same: doing so always puts investors at risk of selling at a price above or below the net asset value.In contrast, in the RBTC model, dividends are realized directly at the NAV of the record date.

Expand investors’ access

RBTC may also expand the investor base of Bitcoin treasury reserve companies.By offering dividends above stock exposure, it may attract the following groups:

• Pension funds and insurance companiesLooking for a reliable source of income.

• Stock investors seeking profitsIt is not possible to obtain Bitcoin through existing non-yield Treasury bonds.

• Current debt investors(perpetual bonds, term debt or convertible bonds) may prefer a low-risk, equity-based structure with periodic returns.

RBTC is an innovative model based on the principles of perfect capital management.It combines pure equity financing, a two-way capital strategy and an optional income layer to provide investors with less risky and more flexible Bitcoin investment tools.Given its philosophy of reducing bankruptcy risks and the ability to achieve NAV through dividends, RBTC can achieve a premium, and at least achieve a more stable NAV premium over time, even if it does not bring a higher premium.In this way, it not only provides a safer way to hold Bitcoin, but also provides a more stable platform for creating Bitcoin returns.

Risk-return spectrum of corporate strategy

The analysis of financial instruments and the design of RBTC together form the risk-reward map of Bitcoin treasury companies.Financing portfolio and capital discipline determine the position of the company on this map: the higher the degree of external debt and constraints, the higher the risk of permanent capital loss; the clearer and more flexible the equity foundation, the lower the risk.

We illustrate this by comparing four Bitcoin treasury company models:

• Elastic Bitcoin Treasury Company (RBTC)Adopt an equity-led, anti-rigid model and an optional income layer.Financing relies entirely on equity issued at a premium and does not involve convertible bonds, term debts or mortgage collateral.Since there is no coupon or maturity date, there is no external debt that could trigger bankruptcy, and operating costs are the only fixed claim.The return potential is moderate, driven by issuance efficiency and premium discipline, while the earnings option expands investor appeal.Risk: low, return: medium.

• MetaplanetPosition yourself as a “bitcoin treasury franchise company” in Japan and pursue high growth.Its financing portfolio includes the issuance of shares and shareholder-approved permanent preferred shares, and plans to use Bitcoin as collateral for bank financing in future acquisitions.This introduces lenders’ debt risks and ongoing distribution obligations, but also creates more financing channels.Risk: Medium, Reward: Medium-high.

• Strategy (formerly known as MicroStrategy)Represents the financial engineering model, achieving scale through complex issuance.It relies on zero-interest convertible bonds, multiple permanent preferred stock plans, and ongoing common stock ATM issuance.Stratified debt of convertible bonds and preferred stocks will still increase refinancing and equity dilution risks.Risk: Medium and high, return: high.

• MARA (Marathon Digital Holdings)Originally a mining company, it has now grown into a hybrid miner-Finance Reserve Company.The company’s growth and Bitcoin accumulation are mainly financed through the issuance of large-scale convertible bonds (including recently issued zero-interest bonds) and the cyclical leverage of mining operations.This debt-driven model puts companies at risk of coupons, maturity pressures and operational fluctuations.Risk: High, Reward: High (periodic).

The following figure shows the corporate strategic risk-return spectrum of Bitcoin Treasury Reserve Company:

This map clearly shows that corporate design is not just about pursuing the highest Bitcoin earnings.The difference between resilience and vulnerability is in the financing portfolio and the willingness to remain flexible.RBTC represents the low-risk anchor on this chart, which is a good choice for investors who value stability rather than leverage-driven results.

in conclusion

We introduce the risk efficiency ladder of financial instruments, the risk-reward spectrum of corporate strategies, and the design of Resilient Bitcoin Treasury Corporation (RBTC).Overall, these perspectives show that the structure of Bitcoin treasury reserve companies can not only achieve growth, but also be flexible.RBTC provides a stable and innovative model for long-term Bitcoin accumulation and revenue generation.