jakiro
Author: Andrej Antonijevic, compiled by: Shaw bitchain vision
summary
1. Bitcoin is the only bearer digital asset with a trusted and unchangeable supply cap. Its supply cap is enforced by the decentralized consensus mechanism. Its application is still in the early stages of the global transition from fiat currency.
2. The goal of Bitcoin Treasury Reserve Company is three aspects: to accelerate this transition process by mobilizing funds on a large scale; to accumulate Bitcoin within the company structure; and ultimately build future financial institutions and services based on this.
3. In the short term, these companies can generate Bitcoin revenue; in the long term, these companies can develop into Bitcoin-based full reserve institutions that can provide capital and services to society on a global scale.
Introduction
Bitcoin is the only digital bearer asset with a trusted and unchangeable supply cap enforced by a decentralized consensus mechanism.The maximum supply is 21 million pieces, and its value storage function depends on the degree of acceptance of it by society.
Society is in the process of accepting Bitcoin.The early stages are defined by pioneers who recognize this concept and begin to accumulate Bitcoin.At the current stage, Bitcoin’s acceptance range is even wider: millions of individuals hold Bitcoin, Bitcoin Exchange Traded Funds (ETFs) already exist, brokers and custodians provide access to it, and Bitcoin Treasury Reserves has entered the field.However, the proportion of the population that accepts and participates in Bitcoin is still relatively low.
This means we are in the early stages of the second phase of Bitcoin application.The transformation of digital currency mainly relies on one activity: exchanging fiat currency for Bitcoin.I personally call it “buying Bitcoin”, but essentially exchange depreciating currency for a stable currency.If you rely solely on individuals, this process will take many years.Although it will inevitably develop, especially as fiat currencies continue to depreciate, its speed is relatively slow.Bitcoin Treasury Reserve Company was born for this, as an engine to mobilize funds on a large scale to enhance and promote this application stage.
The purpose of Bitcoin Treasury Company
The purpose of Bitcoin treasury reserve companies is threefold, and they are progressive in sequence.First, they exist to accelerate the transition from fiat to bitcoin by mobilizing funds to buy bitcoin on a large scale.Second, through this process, they accumulate Bitcoin within the corporate structure, creating a collective treasury that individuals cannot build at the same speed or scale.Third, because of this accumulated Bitcoin reserve, they can eventually develop new financial functions and services within the corporate architecture.
In the short term, Treasury Corporation is committed to achieving the first and second goals: mobilizing funds to accelerate transformation, and building enterprise-level Bitcoin reserves in the process.In the long run, once such reserves are established, a third goal becomes possible: to use it as the basis for future business models and social services.
Short-term: Bitcoin earnings
The short-term goal of Bitcoin Treasury Reserves is Bitcoin earnings.Currently, Bitcoin earnings are manifested as an increase in the number of Bitcoins per share.This kind of income is the driving force for large-scale mobilization of fiat money, so it represents the main manifestation of capital market arbitrage between fiat and Bitcoin. This arbitrage is not a textbook-style narrow, risk-free arbitrage, but arbitrage in a broader sense, that is, obtaining value from the asymmetry between the two fields.
All such arbitrage opportunities, and the resulting Bitcoin earnings, are derived from asymmetry flowing between two fundamentally different fields.The pricing and valuation of fiat currency tools are based on fiat currency expectations, while the operation of Bitcoin is based on completely different assumptions of scarcity and value.The treasury company has built a bridge between these two areas through the corporate structure in the fiat currency field and converting it into bitcoin.The gap between the two, namely the difference between expectations and pricing, is the root cause of arbitrage.
However, Bitcoin earnings are not a single concept.While currently measured as growth per share of Bitcoin, innovation may make it take other forms that have not yet been designed and standardized.What is important is not the specific calculation method of the account unit or the income, but the economic reality behind it: large-scale execution of fiat currency to Bitcoin will inevitably bring benefits.
ETFs may also hold Bitcoin, but it simply exchanges fiat currency one-to-one with Bitcoin.It does not acquire arbitrage opportunities and does not generate any additional benefits other than passive investment.In contrast, treasury companies adopt an active strategy: it mobilizes capital markets to accelerate accumulation, gains from arbitrage, and builds a Bitcoin reserve that is valuable in itself.This reserve is not static.In the long run, as the Treasury company develops into an institution that provides services on its basis, it will become the basis for future uses.
Whether expressed in terms of an increase in Bitcoin per share or other forms of financial gain, Bitcoin earnings represent the same principle: it incentivizes investors to accumulate Bitcoin together in the corporate structure rather than an incentive mechanism for each to fight.
The window of opportunity is limited.As the degree of adoption deepens and the asymmetry decreases, these transitional advantages will decrease.This is why the current stage is so critical.
Long-term: Building future institutions
In the long run, once the transitional arbitrage is over and a large amount of Bitcoin reserves are accumulated, Bitcoin treasury companies can develop into future Bitcoin-based financial institutions.
These institutions can play a variety of roles in society: acting as lenders, providing mortgage services, or acting as insurance companies.With Bitcoin as a reserve, they can underwrite risks, provide insurance, support entrepreneurial activities for businesses and individuals, and provide funds that exceed national boundaries that are not labeled by the country, verifiable and transparent on-chain.
Such institutions will reflect the principle of full reserve finance.The source of funds is the company’s own capital, not public debt.Financial services will be provided in a verifiable mortgage without the need to participate in the monetary creation inherent in the partial reserve system.
In a world where Bitcoin has become the primary store of value, this model creates a sustainable organization based on robust design.
in conclusion
Bitcoin Treasury Reserve Company is the capital market engine that drives the transition from fiat to Bitcoin.In the short term, they mobilize funds to accelerate Bitcoin adoption and build a corporate reserve system for Bitcoin, thereby gaining benefits from the asymmetry between the two fields.In the long run, these Bitcoin treasury companies will become the basis of a full reserve institution supported by Bitcoin, and can provide funds and services worldwide.
