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Bitcoin treasury companies — entities that accumulate the digital asset (usually through borrowed assets) — offer clients indirect exposure through their stock. Some believe that these companies bring Bitcoin to Wall Street. Others think that these treasury companies are doing the opposite: turning bitcoiners into so-called “fiat bros.”
In 2021, billionaire and X owner Elon Musk famously replied “Your app sucks” to a crypto wallet that didn’t support user access to their private keys. Now, when Bitcoin ETFs and Bitcoin treasury companies get so much attention, it may seem that self-custody has silently left the scene.
Although the big narrative is occupied with the news about treasury companies spending millions of dollars (of borrowed money) to buy as many bitcoins as possible, bitcoiners who (at best) don’t care about “indirect exposure to Bitcoin” didn’t go anywhere. They are just not as visible on social and mass media.
Indirect Bitcoin exposure, or owning paper Bitcoin, is owning certain assets issued by the company that strategically accumulate Bitcoin on its balance sheets. Stocks of Bitcoin treasury companies (for instance, MSTR by Strategy) or exchange-traded funds (ETFs) of asset management companies holding Bitcoin (for example, IBIT by BlackRock) are two of the most popular types of assets that expose users to Bitcoin.
It is assumed that owning these assets allows holders to benefit from the price movements of Bitcoin as they are reflected in the value of these assets. That’s why Bitcoin ETFs, stocks of Bitcoin treasury companies, Bitcoin derivatives, and similar assets are considered to be holding Bitcoin, although it’s essentially paper Bitcoin.
