There is a rapidly increasing number of listed companies, not only in the UK but Globally, announcing the implementation of Bitcoin Treasuries or Reserves.

They buy bitcoin for different reasons: Some hold it as a hedge against inflation or to signal support for the cryptocurrency industry, while some firms have made using debt and/or equity raises to buy bitcoin their primary business strategy. If you want exposure to these companies, aside of perhaps the company's core business, if it has one, then as a retail investor how do you decide where to put your money and essentially, back the right horse?

Well, the 'holy grail' for UK investors investing in any nano/small cap company, by definition, an early stage company, is that Institutional money will follow you in and when that happens you can generally sit back and enjoy the ride up, derisk along the way essentially giving yourself risk-free exposure to the upside. 

Coinsilium, a company previously covered Coinsilium: The UK's future MicroStrategy? have focused their Forza! Bitcoin Treasury (its wholly owned Gibraltar subsidiary, Forza Gibraltar Limited) on being suitable for Institutional investment and it's taken a fair amount of work to get it there.

So let’s discuss the things to consider when wishing to attract institutional investment into the Bitcoin Treasury space, we'll call them the 'Institutional Investor Essentials'

Regulatory Compliance and Jurisdictional Clarity

First to consider is, does the company operate in a 'crypto-friendly' jurisdiction.  A crypto-friendly jurisdiction will include:

• Clear regulatory framework
• Tax advantages or neutrality
• Government or institutional support
• Access to banking and legal services
• Support for DAOs, DeFi, NFTs, etc.

There are a number of crypto-friendly jurisdictions including Switzerland, Singapore, UAE etc.  Gibraltar is another and where for example, Coinsilium's Forza! is domiciled.

Corporate Governance, Management and Board Oversight

Next to consider is the capability of the Management Team and the practices/procedures they have implemented, this will include:

• Board independence with directors experienced in digital assets, finance, law, and compliance.
• Clear oversight of treasury functions and digital asset operations via dedicated committees.
• Robust internal controls and audit mechanisms for Bitcoin treasury management.
• Track record of leadership in blockchain, crypto markets, and regulated capital markets.
• Executive experience in treasury operations and high-volatility asset management.
• Legal and fiduciary understanding of public company responsibilities in crypto

Corporate Governance and Management will be a key consideration for Institutional Investors.  Investors will want to see that in line with the bullet points above, the company operate a transparent and strategic Bitcoin accumulation framework with optional yield strategies clearly scoped within regulatory and risk constraints accompanied by strong balance sheet discipline.

Standard of Advisors (Legal, Audit, Compliance)

Institutional investors will want to see that the company they are investing in has robust Legal, Audit and Compliance advisory systems in place as follows:

• Reputable audit and legal firms with demonstrable crypto and public market experience.
• Advisory relationships that offer multi-jurisdictional legal insight and risk management.
• Consistent and accurate digital asset accounting and audit practices.

Custodianship and Asset Security

When implementing a Bitcoin or Digital Assets Treasury Strategy, it's of paramount importance that the Treasury is secure.  A listed company can't or shouldn't simply by Bitcoin on a computer somewhere in the back-office leaving it vulnerable to hacking or other criminal activity.  The digital assets should have robust custodianship and security procedures in place as follows:

• Use of regulated custodians with insurance coverage and segregated wallet infrastructure.
• Cold storage, multi-signature, and jurisdictionally diversified key access controls.
• Proof-of-reserve capabilities or other transparent validation systems.

Operational Resilience and Risk Management

When operating a Treasury, the company needs to demonstrate it has the relevant policies in place to absorb market events and manage risk.  Bitcoin and other Crypto companies have been 'burnt' in the past when market events have occurred such as swings in the crypto price or negative sentiment has ensued. 

This was a particular concern in the past however Bitcoin with its wider adoption and growing Global Political recognition seems more resilient to the volatility it has historically experienced, nether the less, companies still need to demonstrate they have the appropriate policies in place including:

• Defined treasury policies covering acquisition, drawdown limits, and rebalancing.
• Disaster recovery, cyber protections, and business continuity frameworks.
• Pre-set thresholds and risk bands for stablecoin use or DeFi interaction.

Alternative Exposure vs. ETFs

Why not just buy an ETF?  

Coinsilium as an example, looks beyond the basics of a Bitcoin ETF in that its strategy incorporates alpha generating yield mechanisms with timing flexibility. 

The company will incorporate a Bitcoin-native operating model but without the structural limitations of an ETF.  Companies like Coinsilium therefore offer additional upside through their treasury growth and crypto-native yield models.

Investor Relations and Transparency

Institutional Investors will want to see regular updates on both the growth and performance of the Bitcoin treasury.  Clear disclosures should be aligned with Capital Markets regulations and investor protection norms.   The treasury company should offer commitment to security in transparency demonstrating no over exposure.  

Brand, Mission, and Market Signaling

As touched on before, with several Bitcoin Treasury plays entering the market, a company will need to demonstrate clear branding and market positioning.  There needs to be mission clarity as a Bitcoin focused reserve company and the thesis that Bitcoin is and will increasingly become a reserve asset.  Such a company needs to position itself as a market leader in the field participating in the industry and the evolution of regulation.

How Does Coinsilium Stack Up?

So, in this Blog, we've discussed key considerations, particularly for Institutional Investment into Bitcoin Treasury companies in a market that is relatively new, particularly in the UK.

Coinsilium have been working hard over the last year or so to make its company both a retail and 'institutional ready' investment proposition allowing exposure to Bitcoin Treasury.

Via its wholly owned subsidiary Forza!, the company operates within a clear crypto-friendly regulatory framework with a strong Management team that have a wealth of industry experience in the crypto and digital assets space.  

The company has also developed robust Corporate Governance and Operational Resilience policies complimented by its specialist crypto Legal Advisors.  Additionally, the company have placed a strong emphasis on Custodianship and Digital Asset Security, of paramount importance for a Bitcoin Treasury company. 

The company have also recognised the importance of Investor engagement, regularly updating the market on both Coinsilium's and Forza!'s activities as evidenced by the number of weekly X Live Spaces the company have scheduled to date.

As mentioned at the beginning of this article, some Bitcoin Treasury focused companies will emerge as leaders in the field, and it will be largely dependent on the capability of Management, their operating model and other considerations previously mentioned.  It's becoming a lively space, and in-flows could be significant, in that case as an investor, it could be about backing the right horse, Coinsilium is one leading the field!