The dilution trap where Bitcoin holdings rise while shareholder value stalls

Buying shares in a Bitcoin treasury company gives ownership in a business that holds Bitcoin, and management decides how to pay for the coins and when to buy or sell them.

The company also has bills to pay and may owe money to lenders, so the shares' value depends on those decisions and Bitcoin's price.

France's Capital B is a Bitcoin treasury company that makes that relationship easy to see. Between Aug. 17 and Sept. 7, its treasury Bitcoin holdings increased from 3,145 BTC to 3,521 BTC, roughly 12%.

However, Bitcoin per share barely moved under the company's calculation, which includes some shares that could be created in the future. More Bitcoin came into the business alongside more claims to ownership.

That result explains why the method of paying for Bitcoin belongs at the center of any assessment of a treasury stock.

Selling new shares raises cash, but existing shareholders then own a smaller percentage of the company. Borrowing preserves their percentage for the moment while adding a repayment obligation. Either can work well on favorable terms, but both affect the investment's value.

Capital B is listed on Euronext Growth Paris and adopted its Bitcoin strategy in November 2024. Previously known as The Blockchain Group, it also retained technology-services businesses. Its operating-company portfolio includes iORGA, which builds web applications, and Trimane, which supplies business-intelligence and AI consulting.