Scaling Bitcoin Treasuries with M&A and Perpetual Preferreds

• My 'briefing notes' summarize the content of podcast episodes; they do not reflect my own views.
• They contain (1) a summary of podcast content, (2) potential information gaps, and (3) some speculative views on wider Bitcoin implications.
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Summary

The September 23, 2025 episode of Coin Stories features Matt Cole and Eric Semler discussing Strive’s acquisition of Semler Scientific and the case for scaled Bitcoin treasuries. Cole and Semler argue that perpetual preferred equity can fund rapid Bitcoin accumulation while managing dilution and targeting Bitcoin-per-share growth. They contend consolidation and institutional access thresholds will shape valuation, capital costs, and the pace of sector maturation.

Take-Home Messages

1. Scale Advantage: Larger market caps reduce funding costs and improve institutional access.
2. Perpetual Preferreds: Non-maturing funding aligns with an indefinite-lived Bitcoin asset.
3. Accretion Discipline: Immediate deployment is justified only when expected returns exceed financing costs.
4. Consolidation Thesis: Sub-scale treasuries become sellers; disciplined M&A sets comps and improves liquidity.
5. Operating Resilience: A credible operating business can stabilize cash flow and support valuation multiples.

Overview

The discussion frames Strive’s acquisition of Semler Scientific as a path to scale where capital becomes cheaper and liquidity deepens. Matt Cole emphasizes that an operating platform can coexist with a balance sheet oriented toward Bitcoin accumulation. Cole and Eric Semler argue that market-cap and float thresholds gate access to large allocators.

Cole outlines a capital stack centered on perpetual preferred equity to match an infinite-duration asset with non-maturing liabilities. He contrasts multi-year return assumptions for Bitcoin with coupon costs to justify immediate deployment rather than pacing buys. He prioritizes growth in Bitcoin per share through cycles over managing quarter-to-quarter volatility.

Semler stresses that small treasury companies struggle to issue accretively, which creates natural M&A flow. He notes that premium transactions can reset peer valuations and widen access to capital. He views the combined entity’s scale as a differentiator for repeat issuance.

Both highlight NAV discounts and premiums as constraints that affect issuance timing and deal math. They describe a “sweet spot” measured in tens of thousands of Bitcoin where fee drag falls and syndication repeats. They expect several differentiated treasury models to coexist across leverage, yield, and operating exposure.

Stakeholder Perspectives

1. Institutional allocators: Require sufficient market cap, float, and disclosure to justify positions and index inclusion.
2. Investment banks: Prefer scaled issuers and minimum deal sizes that support efficient perpetual preferred syndication.
3. Existing treasury companies: Face pressure to merge or sell if they cannot issue accretively or cross key thresholds.
4. Retail shareholders: Monitor Bitcoin-per-share growth, dilution risk, and persistent NAV discounts or premiums.
5. Regulators and exchanges: Scrutinize leverage, risk disclosure, and fair presentation of NAV and financing assumptions.

Implications and Future Outlook

Financing conditions will determine whether perpetual preferred issuance remains accretive as rates and risk premia move. If coupons rise or NAV discounts persist, immediate deployment becomes harder and M&A selectivity increases. Transparent metrics around Bitcoin per share and issuance discipline will shape investor trust.

Over the next cycle, multiple treasury archetypes will emerge, differentiated by leverage, yield policy, and operating ballast. Entities that maintain access to scalable funding and communicate NAV dynamics clearly will attract durable followings. Operating businesses that add cash flow without distracting management may command higher multiples.

As consolidation progresses, premium deals can reset sector comps and expand liquidity for survivors. Index eligibility and deeper research coverage can lower the cost of capital, reinforcing scale advantages. Governance practices that align incentives with long-horizon outcomes will be tested during drawdowns.

Some Key Information Gaps

1. What market conditions and investor terms are required to reliably issue perpetual preferred equity at scale? Establishing repeatable issuance parameters is essential for accretive growth and sector maturation.
2. Under which return and financing scenarios does immediate Bitcoin deployment remain accretive across cycles? Stress-tested thresholds guide purchasing discipline and risk management.
3. What policy or mandate changes would unlock institutional participation in additional Bitcoin treasury companies? Clear rules expand the investable universe and deepen liquidity.
4. Which M&A screening criteria identify targets that improve accretion without diluting strategic focus? Robust filters help avoid value-destructive deals and preserve per-share outcomes.
5. How should capital be allocated between operating growth and Bitcoin accumulation to maximize per-share outcomes? A principled allocation rule can stabilize cash flows while compounding Bitcoin density.

Broader Implications for Bitcoin

Institutional Access Flywheel

Crossing market-cap and liquidity thresholds can trigger index inclusion, research coverage, and lower funding costs. That flywheel can entrench early leaders and raise barriers for late entrants. Over time, this dynamic could concentrate treasury strategies in a handful of durable public vehicles.

Standardization of NAV and Risk Disclosure

Consistent NAV calculation, leverage metrics, and issuance reporting can reduce information asymmetry. Standardized disclosures would enable apples-to-apples comparisons across treasury models. Better comparability can tighten spreads, improve capital access, and reduce governance controversies.

Capital-Structure Innovation Beyond One Firm

Perpetual preferreds, convertibles, and structured facilities may diffuse across issuers once validated. As underwriting playbooks mature, smaller firms could piggyback through club deals or multi-issuer shelves. Broader access would diversify Bitcoin balance-sheet exposure available to institutions.

Operating-Business Hybrids as Shock Absorbers

Combining cash-generative operations with a Bitcoin treasury can smooth funding during market stress. If managed with discipline, hybrids can stabilize coupons and reduce forced selling in drawdowns. This structure may appeal to mandates that require operating cash flows alongside asset exposure.

Regulatory Focus on Leverage and Marketing Claims

Supervisors will likely prioritize accurate NAV presentation, leverage limits, and fair marketing of return assumptions. Clear guardrails can protect investors without throttling innovation in capital access. Predictable oversight can lower risk premia and support sustainable sector growth.