If the Bitcoin Treasury trades at a lower price than the Bitcoin it owns, the cheapest way to increase its total Bitcoin exposure per share may be to buy back its own shares.
UK-listed B HODL Plc tested its reversal in the first week of its share buyback. We paid approximately £37,985 before fees to cancel 823,400 shares, resulting in approximately 24% more gross net asset value per £1 than if we had used the same cash to buy Bitcoin at a comparable price.
This 24% edge is before fees, and the numbers fall short of representing the full increase in NAV per share.
B HODL’s official dashboard on July 19th showed 166.487 BTC, share price 5.25 pence, and market capitalization of £7.385 million. At the displayed Bitcoin price of £48,237, your holdings would be worth around £8,031,000, a difference of around £646,000.
Applying the latest announced post-cancellation number of shares at the same share price, the value of the shares would be approximately £7.378 million, approximately £652,000, or 8.1% less than the value of Bitcoin. Both sides of the comparison move continuously.
Why buying stocks is better than buying Bitcoin
B HODL’s £100,000 share buyback authorization came into effect on 9 July. The disclosure covers purchases on 9 July, 10 July, 13 July, 15 July and 16 July, totaling 823,400 shares at a weighted average calculated value of 4.613p. Approximately 38% of the authorized amount, excluding fees, was used for the purchase.
After the announced cancellations, the number of shares decreased from 141,366,091 to 140,542,691. Holding 166.487 BTC constant, total Bitcoin per share increases from 117.77 to 118.46 sat, an increase of 0.69 sat or 0.59%.
At the same Bitcoin price of £48,237, that means you can buy around 0.787 BTC for £37,985. Spreading this purchase across the original number of shares adds approximately 0.557 Sats per share compared to the 0.690 Sats increase from the buyback. Based on these matched assumptions, canceling the shares would have increased per pound growth by approximately 24%.
B Why can HODL buy and sell stocks?
B HODL continues its on-market issuance program in parallel with share buybacks. The company’s ATMs only allow the sale of stocks if they are increasing under the company’s Bitcoin-mNAV framework.
These tools work together to create capital allocation switches. Issue stock when it has the potential to generate more Bitcoin per share, and cancel stock when the stock itself provides cheaper Bitcoin exposure.
Still, a market cap below total Bitcoin holdings is not the same as a discount to the full NAV. Full NAV also depends on cash, debt, operating assets, costs and the value of B HODL’s Lightning Network business.
The company’s most recent interim balance sheet is historical, so the first week represents an increase in total net assets per share based on the stated assumptions, rather than an increase in current NAV per share.
If other Bitcoin Treasuries are trading below the BTC value per share, the impact is conditional but clear.
Issuing more discounted stock may dilute your Bitcoin exposure, but repurchasing Bitcoin may outperform buying BTC directly.
Whether that is the right thing to do remains dependent on funding sources, debt, transaction liquidity and operational needs, and this discipline is increasingly shaping the broader finance sector.
(Tag Translation) Bitcoin
