GET RICH IN 2025 - HOW TO VALUE BITCOIN TREASURY STOCKS

Summary

In this video, Adam Livingston breaks down a revolutionary approach to analyzing Bitcoin Treasury companies, challenging traditional valuation methods. He introduces innovative metrics like Premium Compression Velocity (PCV) and MNAV Months to Cover, arguing that Bitcoin treasuries should be measured as dynamic capital conversion machines, not traditional businesses. By emphasizing Bitcoin per share growth and its ability to self-redeem market premiums, Livingston demonstrates how these companies, through their reflexive growth, can defy conventional market analysis. He highlights the importance of time, velocity, and efficient capital absorption, positioning these metrics as the future of Bitcoin treasury valuations.

Takeaways

• 😀 Traditional valuation methods like PE ratios and discounted cash flow are obsolete when it comes to Bitcoin Treasury companies.
• 😀 Bitcoin Treasury companies are not regular businesses; they act as 'monetary black holes' that convert fiat into Bitcoin without selling products or producing recurring revenue.
• 😀 The market struggles to price Bitcoin Treasury companies properly because it uses outdated valuation models that don't account for their unique characteristics.
• 😀 The real value of a Bitcoin Treasury company lies in its ability to 'self-redeem' its premium through Bitcoin per share growth, not just in its market multiple.
• 😀 The metric 'BTC yield' is the core operational measurement that indicates how fast a company is growing its Bitcoin per share.
• 😀 The MNAV (Multiple of Net Asset Value) alone is not a useful measure; the speed at which a company can burn through its premium (known as 'premium compression velocity') is far more important.
• 😀 Premium compression velocity (PCV) is a powerful metric that quantifies how fast a Bitcoin Treasury company is reducing its market premium by growing Bitcoin per share.
• 😀 PCV allows you to compare companies' growth velocities regardless of their initial market premiums, offering a more accurate picture of their value.
• 😀 A company with high PCV and low MMC (Months to Cover) is an efficient Bitcoin Treasury that is actively compressing its premium, while a low PCV with high MMC indicates fragility.
• 😀 The market has yet to properly recognize the power of Bitcoin Treasury companies' self-compounding capital engines, which is why PCV and MMC are set to become essential metrics for institutional investors.

Q & A

What is the central theme of the video?

The central theme of the video is the valuation of Bitcoin treasury companies using a new framework, focusing on metrics like Bitcoin per share growth, premium compression velocity (PCV), and MNAV months to cover, instead of traditional valuation models like price-to-earnings or discounted cash flow.

What is the issue with traditional valuation models according to the speaker?

The speaker argues that traditional valuation models like price-to-earnings (PE), discounted cash flow (DCF), and fair value are outdated and ineffective when applied to Bitcoin treasury companies. These models rely on assumptions that don't align with the unique nature of Bitcoin treasury companies, which operate as capital conversion machines, not traditional businesses.

What is the key difference between Bitcoin treasury companies and traditional businesses?

Bitcoin treasury companies differ from traditional businesses because they don’t sell products, optimize margins, or produce recurring revenue. Instead, they focus on converting fiat into Bitcoin, amplifying balance sheet torque, and benefiting from inefficiencies in capital allocation by other companies.

What is the role of MNAV (Multiple of Net Asset Value)?

MNAV is a metric used to measure the market's valuation relative to a Bitcoin treasury company’s Bitcoin holdings. It shows how many times the company's market cap exceeds the value of its Bitcoin holdings. However, the speaker argues that MNAV alone doesn't provide a clear picture of the company's value due to its failure to account for the company's actual operational dynamics.

What does the speaker mean by 'reflexive time decay' in Bitcoin treasury companies?

Reflexive time decay refers to the process by which the premium (market valuation above Bitcoin holdings) can be continuously reduced or 'vaporized' over time through Bitcoin per share growth. Unlike traditional businesses, Bitcoin treasury companies can actively reduce their premium by increasing the amount of Bitcoin each share represents.

What is BTC yield, and why is it important?

BTC yield refers to the rate at which a Bitcoin treasury company increases its Bitcoin holdings per share. It is the core operational metric that drives the company’s ability to reduce its premium. The higher the BTC yield, the more effectively the company can convert its market premium into Bitcoin, compressing its valuation faster.

What is the 'MNAV months to cover' (MMC), and how does it work?

MMC is a metric that calculates how long it would take for a Bitcoin treasury company to completely eliminate its market premium based on its current Bitcoin per share growth rate. It answers the question: how many months will it take for the company to 'burn' through its premium at its current rate of Bitcoin acquisition?

How does Premium Compression Velocity (PCV) differ from traditional valuation metrics?

PCV measures the speed at which a Bitcoin treasury company burns through its premium, taking into account both its market NAV multiple and its BTC yield. Unlike traditional static valuation models, PCV focuses on the rate of change and operational efficiency, allowing investors to assess how fast a company is reducing its market premium over time.

Why is PCV considered a superior metric for evaluating Bitcoin treasury companies?

PCV is superior because it accounts for both the time and speed at which a Bitcoin treasury company eliminates its premium, offering a dynamic view of the company’s capital efficiency. It allows investors to compare companies with different NAV multiples and growth rates, showing which companies are efficiently compressing their premium and which are not.

What does the speaker mean when he says Bitcoin treasury companies are 'balance sheet reactors'?

The term 'balance sheet reactors' refers to Bitcoin treasury companies as self-compounding capital engines that operate under reflexive time decay. Instead of following traditional business models, they convert fiat into Bitcoin and use that Bitcoin to increase shareholder value. Their growth is driven by the compounding effect of Bitcoin per share growth, rather than traditional profit-driven business models.