Battle-Tested Strategies of Holding Bitcoin on the Balance Sheet

Hi everyone, I'm Julia Duzon. I am the CEO of River. River is a U.S.-based Bitcoin-only exchange. We also offer Bitcoin banking to individuals and businesses. Today's panel is really going to answer a simple question, which is: should a normal operating business hold Bitcoin on its balance sheet? Not speculate, not trade it, but hold it as a long-term strategic asset.

​

The folks you're going to hear from today are not Bitcoin treasury companies like Strategy. Instead, we are operating businesses and operators who also maintain Bitcoin and use it strategically in our businesses. Before we jump into intros, I just want to get a sense of who is in the room. Can I see a show of hands if you run or work at a business? All right, most folks. Do you run or work at a business that holds Bitcoin on its balance sheet today? Oh, wow. Easy crowd. Great. Do you work at a business that's maybe considering it? All right, so we have a few folks on the fence. Last one, any skeptics in the room? Anyone who thinks it's just, frankly, too risky for a business to have Bitcoin? All right. We have a pretty easy and friendly crowd. You better convince our final few. With that, I'm going to hand it over to the panelists. Can you all give quick intros? What does the company do, how do you make money, and what's your role?

​

I can start. Hello, everyone. I'm from Trezor Company. Basically, what we did in 2014 is we invented the first Bitcoin and crypto hardware wallet in the world. Since then, we've been operating, and our mission is steady. Our business is pretty simple. We sell hardware wallets and we offer some complementary software services. Personally, I have been working as CFO of Trezor for close to ten years, so in Bitcoin, it's quite a lot of time. We've been through a lot of ups and downs, and that's what we will talk about.

​

Good morning, everyone. My name is Leon. I work for Fedi. Fedi combines a Bitcoin wallet, chat, community spaces, and a highly flexible privacy app. Fedi has been around for a few years. We started in 2022. I work as head of operations, and I cover a lot of the back office functions, including treasury management. In terms of how we make money, we charge a transaction fee on the transactions that occur within the app.

​

Good morning, everybody. My name is Di Lewis. I am the CFO at BTC Inc., parent company of Bitcoin Conference, Bitcoin Magazine, Bitcoin for Corporations, and I probably have the easiest answer for how we make money: everyone sitting here right now. We sell conference tickets and sponsorships, we sell advertising on our media platforms, and corporate subscriptions through Bitcoin for Corporations.

​

Awesome. In one line, how do you use Bitcoin in your business?

​

Very simply said, we earn Bitcoin, we hold Bitcoin, and we pay with Bitcoin. So it's a full circle.

​

We use Bitcoin in our treasury. We use Bitcoin in our operations, paying suppliers and also paying employees.

​

Similar to what Štěpán mentioned, we're fully integrated with Bitcoin. You can walk the floor and probably see some signage that you can buy a coffee in Bitcoin. You can go to our merch store and pay in Bitcoin. Every single product that we offer at BTC Inc. has a payment option in Bitcoin. On the other side of the counter, we offer the option to pay every vendor and our contractors, the great people who work with us and support this event, in Bitcoin. So we have a full circular economy.

​

Great. Let's talk a little bit about holding Bitcoin. Štěpán, I'm going to start with you because Trezor has been at this a long time. You guys were holding Bitcoin before Bitcoin treasury strategy was even a thing. How did you start doing that, and how has the thinking around your strategy evolved over the years?

​

Let me start with the early days. In 2014, we introduced the first hardware wallet. It was called Trezor Model One. The price was very fair: one Bitcoin per device. We had a special edition called the Trezor One Metallic Edition, and the price was three bitcoins, but it was $100 back then. That was the moment we really started to earn bitcoins, and that was the moment we started to have our own Bitcoin treasury.

​

Then it was ups and downs. To be specific, in 2017, maybe there are people in the audience who remember 2017. It was a $21,000 all-time high, with the big Bitcoin hype. Then it was a brutal crash. I remember it as if it was yesterday. Bitcoin was down 84% at some point. For Trezor, sales and revenues were down 90%. It was brutal.

​

Thank God our founders understood the cycles. They set the strategy: relax, it's okay. Let's build great stuff in the bear market and scale in the bull market. I think this was the very basic part of our strategy. Expect that there are cycles and work, work, work.

​

We learned one thing the hard way. Let me say it loud: we do not consider Bitcoin treasury to be a financial reserve, to be very honest. It's not working capital. It doesn't work like that. When Bitcoin is down, your reserve is down as well, and the revenues are down as well. For us, Bitcoin is more like venture capital, and it worked very well. For example, during bull runs we used the Bitcoin reserve to invest into the company.

​

I think we are one of the few companies in the segment that has been operating for more than ten years without a single dollar from investors or venture capitalists. We are a fully privately owned company. We were able to finance our growth through our own finances, and we never asked any investor or venture capitalist, which means 100% freedom. I think this is the way the Bitcoin treasury can help build your company.

​

Leon, not everyone in here is the sole decision maker for whether or not their business should have Bitcoin. What was that journey like at Fedi? How did you get your board, your investors, and other executives all aligned? Give us the details. Was there any drama? How did you decide how much to put into Bitcoin?

​

Really good questions. First of all, Fedi is a VC-backed company. When the company first started, all of the founders were Bitcoiners, so philosophical buy-in was there from the beginning. Our investors are also Bitcoiners, so again, philosophical buy-in was there from day one. That was actually very, very easy.

​

What I would say is that philosophical buy-in is very different from operational readiness. Getting people to buy Bitcoin is straightforward, but then what do you do afterward? How do you manage that? How do you get the discipline needed to weather potentially 80% drops, but also discipline when it potentially doubles? It's important to bear in mind that they are very different.

​

In terms of how much and how we decided, what we did at the very beginning was think through that we needed a policy. We didn't want to be making this up as we went along. I would definitely say that is one of the worst things you can do. We're all humans. We have emotions. In the bull market, we feel great. In the bear market, we feel horrible.

​

At the very beginning, we put together a framework. In this, we modeled various scenarios and discussed them around a roundtable. What happens, what will we do if the price drops by 60%? What will we do if it doubles? How much cash do we need to have? We laid out all of these different rules, and we did it at the very beginning, not in the midst of a drop in the price.

​

Having that discipline is absolutely key, and making sure that you actually have this framework. One other thing I would say is that having it is a confidence builder for your board, because they need to see that you are actually thinking about these things and not just making it up as you go along.

​

I think that's really important. We probably should all have frameworks for our personal investing. As you all know, the highs of Bitcoin feel so high, but the lows can also feel really low. Make sure you don't bring emotion to those decisions. BTC Inc. actually uses Bitcoin. For the folks who want to start using it in day-to-day operations, earning their revenue, paying vendors, what does that look like?

​

There are a lot of tools out there. There's no one size fits all in terms of accepting Bitcoin. What does that mean? There are a plethora of tools. There's no pressure to dive headfirst. There are great partners. You can start with River, which does a great job onboarding small and medium-sized businesses. You don't have to go at it alone.

​

It's not every size fits all for everybody. One thing I want to mention with Leon, in terms of the framework side, is that I completely agree. There's that saying that everyone has a plan until they get punched in the face. If you operate as a Bitcoin business, have a plan to get punched in the face. This is what we've learned. You are going to get punched in the face. That's where the volatility is. Know what you're going to do when that happens, and that takes all the emotion out of it.

​

I tell my team when they're asking what's going on and whether we are selling: you don't want your CFO to be a trader. We have a framework. We have a policy. We know what's going to happen in any scenario, and we stick to that policy.

​

A lot of folks here already own Bitcoin, but I think a common question you have is how much? I'm curious for you all to make it really practical. Say folks run a $5 million to $10 million a year business in revenue. How much should they be allocating toward buying and holding Bitcoin?

​

To start with our own strategy, at Trezor we allocate 30% to 50% into Bitcoin from the whole of our financial resources. Why is it 30% to 50%? It can be different in the bear market. Usually after the drop, it can be 30%. What is great is that we earn bitcoins. We sell our hardware wallets for bitcoins, so we can do DCA as a company. It works on the personal level, but it works on the company level as well. In bull runs, it can be more than 50%, which is sometimes a good signal that now it's time to sell something, or maybe not.

​

For an average company, there is no simple answer. It starts with one thing: is the company financially ready and able to build a Bitcoin reserve? If you are a startup with a runway for 12 months, I don't think it makes any sense to start a Bitcoin treasury. But let's say, as in your question, it's a profitable company with $5 million to $10 million. It depends on your specific use case, and it also depends on the taxes.

​

For example, in Europe there are some countries in which, if you hold Bitcoin as a person for more than one year, it's tax-free, but it's only for physical persons. Sometimes it makes sense for the owners of the company to pay dividends and hold the Bitcoin on a personal level.

​

It all starts with the use case. Then do your taxes. It's very important. For example, if you want to pay your employees in Bitcoin, it only makes sense to allocate 2%, 3%, 5% to Bitcoin. You can calculate it, start, and see how it's going. The first step is to really start. You don't have to overthink it. You just need to survive the first cycle and test your features and use cases for the company. Maybe 1% is a good start for you.

​

Any other thoughts?

​

Similar to the answer about how to get started accepting Bitcoin, it's very dependent on the business. Your cash reserves, how healthy your margins are. Definitely start conservative. Be patient. There's no rush. No one is going to be MicroStrategy overnight. That's how you build the conviction. That's how you get the buy-in from your board members, executive team, and so on. Start small.

​

Also understand that most people are very reluctant to spend their Bitcoin. You may turn on all the levers and say you accept Bitcoin, and then it's crickets, nobody showing up to do that. What I would also say is don't wait for the world to come to you. One thing we do at BTC Inc. is, yes, we accept Bitcoin out on the floor, but it's not going to be the majority. You can see most people are still using credit cards.

​

So what we do is convert 10% of all revenue earned through credit card processors to Bitcoin. We accumulate steadily on our own terms as we need to. There are a lot of different configurations that can be right for your business. Be patient. It's okay to start small, and definitely make sure you have a stable business first. Bitcoin is not a miracle fix. If your business has issues, you can't just orange-label Bitcoin on it and make all your troubles go away.

​

I completely agree. River actually holds 50% of our treasury in Bitcoin. I was telling a friend in private equity about that, and he almost died thinking that was an incredibly aggressive strategy. As we were talking more, what I then shared is that for us, that's actually quite conservative because of the strength of the balance sheet. The total balance sheet is $70 million, with $35 million held in cash, which is three years of our fixed expenses if our revenue went to zero.

​

I would say always start there. As an operating business, you need your treasury to be able to pay your expenses for an extended period of time. Your delta after that is what you can start making investments in and start to allocate to Bitcoin.

​

Custody is also an important topic when it comes to holding Bitcoin as a business. Leon, did you have any early learnings, and what would your advice be for folks around how to hold Bitcoin for their business?

​

Absolutely. When we think about custody, we really want to be thinking about low-probability, high-severity scenarios. This is a really good way of managing risk. Let me give you one story of something that happened to us once. We hold our Bitcoin in a multisig wallet, and we have signers of that wallet geographically dispersed around the world, which is good practice.

​

There was a scenario once where one of the signers was giving birth, and at the same time another signer was in the Middle East during the recent conflicts, where missiles were being fired, and was also unavailable. So we had two out of the three signers offline. What do you do when, in that scenario, you need to move capital quickly or urgently?

​

Thankfully, both of these signers were able to come back online relatively quickly. But these types of scenarios are really good ways of illustrating that you have to think about not just the everyday scenarios, and not always assume that people will be available. This isn't like managing a bank account. This is very, very different, and some of the challenges are unique to Bitcoin. When it comes to custody, definitely think about some of these low-probability but high-severity scenarios.

​

We've talked a lot about the risks. I'm curious, what are some of the benefits to having Bitcoin in your business that are not just about number go up?

​

To give you some particular examples, it really worked well for Trezor in multiple ways. First of all, we pay our employees in Bitcoin, or there is an offer to them. They can say, for example, that they want to be paid 10%, 50%, or even 100% in Bitcoin. It works very well because it is not only brand building and an HR thing, but it is also a check that these employees, because they work for a Bitcoin company, are the right people to have in the company. To be honest, we have a few people who are paid 100% in Bitcoin.

​

Of course, you can pay with Bitcoin in the shop. You can buy Trezor for bitcoins. That's another example: you want to sell your products in Bitcoin.

​

The third one is Trezor Academy. We support multiple activities around the globe, and this one is particularly focused on Africa. We really want to help people in Africa adopt and orange-pill Bitcoin, and be able to really start using Bitcoin on a daily basis. It's not easy to send money to Africa without any complications. Trezor Academy is a great example. It has been working for several years, and it's great. You can fund it with bitcoins and it works perfectly. It can also be brand building and doing some good stuff for the world.

​

Any other benefits you all have seen?

​

I'll echo that last comment, which is really around suppliers. At Fedi, we are a Bitcoin company, and we want to see a world where people use Bitcoin. We want to see circular economies. If that's the world we're building for, it only makes sense that we actually use Bitcoin to pay our suppliers. We do that a lot.

​

What's really interesting is that we have a number of suppliers who accepted Bitcoin for the first time ever. They had heard of Bitcoin, and this is in Africa also. They had heard of Bitcoin and thought, okay, we'll give it a try. Maybe I'll accept 50% of payment in Bitcoin. Now they accept 100% of their payment in Bitcoin. So we have, to some extent, orange-pilled our customers, and it helps us achieve the world that we want to see by actually paying customers in Bitcoin.

​

I would say the biggest benefit for a business to use Bitcoin outside of number go up is the payment network itself. It's 24/7, 365. You can't do that with the bank. I'm currently personally renovating our home, and maybe I've been using Bitcoin too often, but banks are a pain. People forget that with banks, you are a customer downstream of all the rules they have to apply, including what the wire is for and what the purpose is.

​

BTC Inc. has been debanked before, and fortunately we could still send all our payments out because we had Bitcoin already. All the plumbing was already there. I know that seems like an edge case for people, but one of the things that's great about a 24/7, 365 payment network is that I can send a payment for business to any vendor across the world. They don't need a bank account. I can send it as quickly as an email, and it doesn't have to go through intermediary banks with interchange fees and maybe three to five business days, maybe eight business days.

​

I can click a link and see the status of this payment. I can see when it confirms. There's nothing like that. For us, especially running a global conference business, I can't tell you how many times we've been in a scenario where the problem solving ends with the question, can they just accept Bitcoin? Then that solves the immediate thing because something held up a shipment or whatever. Don't underestimate Bitcoin as a payment network. That level of transparency, censorship resistance, and the fact that nothing can stop that payment from going through is the biggest unlock for us.

​

The bank failing sounds like an edge case, but we forget quickly. This happened in 2023, when SVB failed. That was impacting not just Bitcoin companies but a huge part of the tech and startup ecosystem. Suddenly, overnight, when they went into FDIC receivership, companies were not going to be able to make payroll. We were also at SVB, and our backstop that Alex and I were talking about was that we're just going to send all of our employees Bitcoin if we can't get the payroll out.

​

I'm curious, what companies would you say absolutely should be adding Bitcoin to their balance sheet? And on the flip side, who shouldn't?

​

I think there's no limitation for the companies that should or shouldn't own Bitcoin or put it in the Bitcoin treasury or on the balance sheet. Again, it's mostly about your use case and why you do that. Always start with the why. Why do you want to do that? If it's because it's trendy, or because someone in your CFO club mentioned it, it's not a good idea.

​

Still, you can investigate it. You can set up some kind of strategy. You can test it with your CEO or on the board, and then you can decide. I think it really makes sense for companies that have a very big balance sheet full of fiat currencies, because these days inflation has become a real problem, at least in Europe. It really makes sense to look around, and there are not too many options for what you can do as a company. Bitcoin might be the answer for these companies. It's not about what kind of business you do or what kind of service you offer. It's mostly about the use case.

​

I would definitely echo that. It depends on how big your cash reserves are. That's definitely one key consideration. Another is local taxation laws. You need to understand how it works in your country. Every country is different, and there are some places that are more favorable to holding Bitcoin on the balance sheet than others. I would say those are two key considerations.

​

It has to solve a real business need. You can't just be the nerdy Bitcoin person who wants to shoehorn Bitcoin into the business. Just like any major business decision, there has to be alignment on what this is actually solving for our business and why we need to do that. There needs to be buy-in for that to actually happen.

​

I don't know, Di, have you heard about inflation? I feel like that impacts every business.

​

This is true. I'm not disagreeing, but I'm saying that needs to come to the surface, and the board and decision makers ought to be bought in. If it's just a novelty or a marketing gimmick, it won't be long lasting.

​

I will give you all one business that I think absolutely has to have Bitcoin. I know this is a friendly audience. If you run a Bitcoin company in the space, you have to have some sort of allocation to Bitcoin. It can be very small. I think of it like, if I ran a burger joint but I was vegan, it just philosophically does not make any sense. From a moral and cultural standpoint, if you run a Bitcoin company, start that allocation to Bitcoin.

​

In the next five to ten years, to close this out, what do you think happens with adoption among businesses for Bitcoin?

​

I'm always very conservative when it comes to the adoption of Bitcoin, not only in the space but also within institutions. But I think what might change in five to ten years is that every serious company will at least have a strategy, and there will at least be a discussion at the board level about whether we want to do that or not. I think this is what is going to happen. It will be a very serious discussion, and as a company you must make the decision. It can be no, it can be yes, but you must have the discussion.

​

I would say that probably in the next ten years, not every company will hold Bitcoin on their balance sheet, but I think it will become a lot more commonplace. In the same way many companies now hold foreign currencies on their balance sheet, they will also consider holding Bitcoin. Adoption still has a little way to go, but I think we're going to get there. I don't think every company will be holding it on their balance sheet.

​

Five years is relatively soon. I think it'll still be pretty niche. It's kind of a slow ball rolling downhill. By ten years, Bitcoin will have been around for over 25 years. It will feel less scary if you have a thesis around Bitcoin. I think we have a friendly audience that, in ten years, the price will be higher than it is today. Let's all hope so.

​

Then CFOs and treasurers will raise the question: why aren't we doing it? Maybe they have a compelling reason why not to, but as the price increases and as Bitcoin as a percentage of total global wealth increases, those questions are going to organically surface because it's just going to be more front and center over time. I would say in ten years, that question becomes a little more ubiquitous. Five years is maybe still too soon for that to happen on a wide scale.

​

We're all low time preference up here, but we're also in a room of early adopters. Kudos to all of you. I would just say the one ask, since many of you have already gotten your businesses to own Bitcoin, is go out and help evangelize it and tell your friends. We can all be innovators together, drive adoption together, and it's actually not that hard to do. Adding Bitcoin to your balance sheet is not a bold decision. If anything, I think it's a very intentional one as an operator. Thank you.