In the realm of conventional finance, assessing a company’s performance typically involves monitoring metrics like revenue growth, earnings per share, or return on equity. But what occurs when a company’s primary strategy centers around accumulating Bitcoin instead of selling products or services?
This is the challenge for a new breed of Bitcoin treasury companies. These publicly traded entities focus on acquiring and retaining Bitcoin for the long haul. To gauge their success, we require a fresh array of evaluation tools.
This article presents these tools—innovative key performance indicators (KPIs) designed to measure how effectively a company is implementing its Bitcoin strategy. Many of these metrics have been introduced by Michael Saylor and his organization, Strategy, where they are visible in their new dashboard. Although these metrics may seem intricate at first, deconstructing them reveals significant insights into whether a Bitcoin treasury company is genuinely adding value for its shareholders.
1. BTC Yield: Measuring Accretion, Not Earnings
What it is: BTC Yield monitors the percentage change over time in the ratio of a company’s Bitcoin holdings to its fully diluted share count. In layman’s terms: how much more Bitcoin exists per potential share of stock.
Why it matters: This KPI is crafted to address a distinct question: Is the company acquiring Bitcoin in a manner that benefits shareholders?
For instance, if a company owns 10,000 BTC and has 100 million diluted shares, that amounts to 0.1 BTC per share. A year later, if it holds 12,000 BTC with 105 million shares, it now possesses ~0.114 BTC per share, representing a 14% increase. That 14% constitutes your BTC Yield.
What makes it unique: BTC Yield is indifferent to profit margins or EBITDA. It concentrates on how effectively the company is expanding its Bitcoin ownership concerning the number of potential shares. This is crucial in a strategy involving equity to purchase BTC. If the management is issuing new shares to acquire Bitcoin, shareholders want to know: is the Bitcoin per share rising or falling?
How to use it: Investors can keep track of BTC Yield over time to determine if dilution (more shares) is being compensated by advantageous Bitcoin purchases (more BTC). A consistently increasing BTC Yield suggests effective management execution.
2. BTC Gain: The Bitcoin-Based Growth Metric
What it is: BTC Gain utilizes the BTC Yield and applies it to the company’s starting Bitcoin balance over a specific timeframe. It indicates how many theoretical “extra” bitcoins the company effectively accrued through positive actions.
Why it matters: This metric visualizes BTC Yield not merely as a percentage but as Bitcoin itself. If BTC Yield for the quarter is 5% and the company started with 10,000 BTC, BTC Gain stands at 500 BTC.
What makes it unique: It enables you to think in Bitcoin terms, aligning with the company’s long-term objective. Shareholders don’t merely hope for more BTC—they want more BTC per share. BTC Gain quantifies how much additional BTC the company would accumulate if it began afresh and grew its holdings positively.
How to use it: BTC Gain is particularly useful for comparing various periods. If one quarter shows 200 BTC Gain while the next displays 800 BTC Gain, it indicates that the company’s Bitcoin strategy had a much stronger effect in the latter period—even if the BTC price remained unchanged.
3. BTC $ Gain: Translating Bitcoin Gains into Dollar Terms
What it is: BTC $ Gain converts BTC Gain into U.S. dollars by multiplying it with the Bitcoin price at the end of the period.
Why it matters: Investors still operate in a fiat-centric world. Transforming Bitcoin-based growth into dollar denominations helps bridge the gap between Bitcoin-focused strategies and conventional shareholder expectations.
What makes it unique: This metric provides a hybrid perspective—Bitcoin-denominated growth viewed through the lens of fiat. However, it’s important to note: BTC $ Gain can reflect a positive value even if the actual worth of the company’s holdings declined (since the metric is based on share-adjusted accumulations rather than fair market value accounting).
How to use it: Employ this metric to contextualize the value (in dollars) that the company’s Bitcoin acquisition strategy might have generated over a specified period—just bear in mind that it is not a profit reflection. It illustrates growth in stake rather than accounting gain or loss.
4. Bitcoin NAV: A Snapshot of Raw Bitcoin Holdings
What it is: Bitcoin NAV (Net Asset Value) represents the market valuation of the company’s Bitcoin holdings. It is simply calculated as: Bitcoin Price × Bitcoin Count.
Why it matters: It provides a clear snapshot of the company’s Bitcoin “war chest,” nothing more, nothing less.
What makes it unique: Unlike traditional NAV used by mutual funds or ETFs, this variant disregards liabilities like debt or preferred stock. It is not intended to reveal what shareholders would receive in a liquidation scenario. Rather, it focuses solely on: What is the current worth of the Bitcoin the company possesses?
How to use it: Use Bitcoin NAV to gauge the scale of the company’s Bitcoin strategy. An increasing NAV might indicate more Bitcoin, rising prices, or both. However, keep in mind that it does not account for debt or financial commitments, so it is not a complete representation of shareholder value.
5. BTC Rating: The Leverage Check You Can Count On
What it is: BTC Rating is a straightforward ratio: the market value of the company’s Bitcoin divided by its total financial obligations. It illustrates how much of the company’s debt and liabilities can be covered by its Bitcoin holdings.
Why it matters: This metric provides a Bitcoin-native view of balance sheet strength. It enables investors to quickly evaluate whether a company’s Bitcoin strategy is underpinned by a robust capital structure or burdened by obligations.
What makes it unique: Unlike conventional credit ratings that depend on complex models and institutional trust, BTC Rating is transparent and verifiable. The inputs—Bitcoin holdings and liabilities—are public data. It highlights solvency plainly, without needing any third-party endorsement.
How to use it: A BTC Rating exceeding 1.0 suggests the company’s Bitcoin assets surpass its liabilities—a strong indicator of strategic flexibility and solvency. A rating below 1.0 may indicate over-leverage or expose the company to refinancing risks. Monitoring changes in this ratio over time provides investors with a valuable tool for assessing the responsible execution of the company’s Bitcoin-centric strategy.
Why These Metrics Are Important Together
Each KPI provides a distinct perspective:
- BTC Yield indicates shareholder-accretive growth.
- BTC Gain translates that into BTC terms.
- BTC $ Gain expresses it in dollar amounts.
- Bitcoin NAV reveals raw Bitcoin value.
- BTC Rating assesses how that value compares with liabilities.
When used together, they furnish investors with a comprehensive overview of whether a Bitcoin treasury company is:
- Effectively growing its stake
- Safeguarding or enhancing shareholder value
- Properly managing risk
One Final Note: These Metrics Are Not Flawless
These KPIs are not conventional financial metrics, nor are they intended to be. They overlook factors like operating revenue, cash flow, or even debt service costs. They also presume that convertible debt will convert, rather than mature.
In essence, they are tools crafted to isolate the Bitcoin strategy, not the entirety of the business. Consequently, they should be utilized in conjunction with a company’s financial statements—not as a replacement.
However, for investors striving to determine whether a company is making prudent moves in the Bitcoin sector, these metrics provide insights that traditional methods fail to deliver: clarity on whether management is judiciously utilizing equity and capital to enhance Bitcoin per share.
And in a Bitcoin-centric world, that might just be the most critical metric of all.
Disclaimer: This content was produced on behalf of Bitcoin For Corporations. This article is intended solely for informational purposes and should not be construed as an offer or invitation to acquire, purchase, or subscribe for securities.
