How To Make A Bitcoin Treasury (Pt. 3)
Operational matters
In past posts, we’ve talked about the various aspects of creating a Bitcoin treasury company. Today, I am going to end this three-part series by focusing on aspects concerning custody, treasury management, and scaling. My new book, “Bitcoin and Faith,” shows churches that it’s possible to establish a treasury setup as a nonprofit or mission-focused organization. For traditional for-profit entities or private citizens who hold at least 1 BTC, this can be for you. Not everyone will have the obsession or fortitude to acquire hundreds of thousands of Bitcoin like Strategy, but we all can do something with whatever we have. Let’s jump into the details now.
It’s one thing to have the structure down for your Bitcoin treasury company. You have the legal aspects sorted out. You have trademarks and logos. You have a thesis, and you’re ready to make an announcement. But how will you handle the important matter of Bitcoin custody? Custody deals with how the Bitcoin will be held, which will aid in reporting and security protocol. If you are going to self-custody, your Bitcoin treasury company will probably be without investors, as self-custody won’t be a good signal for investors; it can work for a solo founder. If you have more than one founder or owner, it’s best practice to look at a multi-sig wallet that will require 2 out of 3 signatures to withdraw any portion of the Bitcoin in the treasury; no single point of failure is a defense and an offense. Company bylaws can help safeguard the Bitcoin and protect founders as well. If you are looking to raise capital, you will need to employ third-party custodial outputs such as what Coinbase or Unchained Capital is able to offer. Also, consider insurance on your Bitcoin holdings!
Treasury management deals with the operational capacity of how the Bitcoin will be managed. This is where your thesis would be activated. How does Bitcoin serve your company, and how will it serve your shareholders’ bottom line (if you have investors)? Will you use Bitcoin as a capital preservation tool? Will you use Bitcoin to generate yield in a TradFi or a Bitcoin DeFi way? Will a portion of the Bitcoin be used to fund operations? Corporate policies that comply with federal and state laws matter.
Lastly, scaling deals will activate your Bitcoin to take your company to the next level. Companies that announce Bitcoin treasuries experience an uptick in media press, investor interest, and even stock price if it’s a publicly traded company. After the buzz wears off, you have to scale the company. How will Bitcoin serve you? It's worth noting that Bitcoin treasury companies could create Bitcoin products, Bitcoin services, or even allow for employees to accept their salary in Bitcoin, in part or in its entirety. Bitcoin 401(k)s will be all the rage in the coming years, although they existed in other forms prior to 2025. If publicly traded, your company could turn into a Bitcoin proxy where investors would be able to have indirect exposure to Bitcoin.
This is where the real work begins. Now, are you starting a Bitcoin treasury company?
— Christopher Perceptions, TwentyOneSociety.com