Knowledge base
The word "yield" gets used in at least two genuinely different ways in and around Bitcoin treasury companies, and mixing them up is one of the easiest, and most consequential, misunderstandings to make in this whole series. It's worth being precise.
In everyday investing, yield describes the income return on an investment, usually expressed as a percentage of its price. A dividend yield is a company's annual dividend divided by its share price; a bond yield is its interest payments divided by its price. This is a genuine cash payment made to the holder, money that actually lands in your account, separate from any change in the underlying price.
As covered in our article on preferred shares, many preferred shares carry a defined dividend, often quoted as a percentage of the share's issue price or target price. This is a genuine, traditional cash income stream, in the sense described above, though the exact rate, terms and conditions depend entirely on the specific instrument in question, and are set out in that instrument's own official documentation, not in any general article like this one.
This is where real care is needed. Some Bitcoin treasury companies report a metric often called "Bitcoin Yield" or "BTC Yield", a figure describing the percentage growth in Bitcoin held per share over a given period, which we covered properly in our article on Bitcoin per share. It uses the word "yield," but it is not a cash payment to shareholders in any way.
No cash or Bitcoin is distributed to you as a result of a positive "Bitcoin Yield" figure. It's a reporting metric, similar in spirit to a farmer describing "crop yield per acre", a measure of how effectively an underlying asset has grown per unit, not a payment of any kind. This is a completely different concept from the traditional, cash-paying yield described above, despite the two sharing the same word.
If a company reports, say, a 20% "Bitcoin Yield" over a period (a purely illustrative figure, not a real one) that does not mean any shareholder receives a 20% cash payment. It means the company's Bitcoin holdings per share grew by roughly that percentage over that period. Confusing the two is an easy mistake to make, and an important one to avoid. Whenever you see the word "yield" used around a Bitcoin treasury company, it's worth checking exactly which of these two meanings is actually being used before drawing any conclusions.
A company can quite reasonably discuss both concepts side by side: an actual, cash-paying dividend yield on a specific preferred share, and a separate "Bitcoin Yield" metric describing growth in Bitcoin per share across its ordinary shares or wider balance sheet. They aren't in conflict with each other, but they answer completely different questions, and it's worth being clear in your own mind about which one any particular figure refers to.
Any specific dividend rate or yield figure depends entirely on the terms of a particular instrument, which vary by issuer and can change over time. Nothing in this article describes, endorses, or should be read as a forecast of any specific rate, product or instrument. Anyone considering an investment should read the full terms of any specific instrument carefully, do their own research, and consider speaking to a regulated financial adviser. Nothing in this article is financial advice.
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In our next article, What Is NAV (Net Asset Value), and Why Does It Matter for Treasury Companies?, we'll explain the concept that ties together much of what we've covered across this Tier.
