Make Execution chapter easier to read #40
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CHATGPT recommended re-write of this chapter:
# Execution
The execution phase is where a bold Bitcoin strategy comes to life. It’s the bridge between planning and reality, requiring precision, prudence, and sometimes nerves of steel. In this chapter, we explore how pioneering companies navigated their Bitcoin treasury implementations and provide a roadmap for executing your own strategy in a smooth, story-like fashion. From high-profile case studies to the nitty-gritty of vendor selection, internal preparedness, and managing holdings after the buy, this is a narrative guide to **getting it right**.
## Learning from the Pioneers: MicroStrategy and Tesla
In August 2020, the boardroom of MicroStrategy buzzed with an unprecedented decision. CEO Michael Saylor had convinced his directors that the company’s $500 million cash treasury was losing value to inflation. The result was a **historic purchase**: 21,454 bitcoins (about $250 million worth) acquired as the company’s new primary reserve asset. This initial move – executed quietly over days to avoid spooking the market – marked the first time a publicly traded firm **bet its balance sheet on Bitcoin**.
MicroStrategy didn’t stop there. Over the next months and years, it continued to **accumulate Bitcoin aggressively**, using every tool at its disposal (including issuing new equity and convertible notes) to raise funds for more purchases. By 2025, MicroStrategy had amassed well over 100,000 BTC on its balance sheet, effectively transforming from a business-intelligence software company into a hybrid software and Bitcoin holding company.
Contrast this with Tesla’s journey. In early 2021, Elon Musk’s Tesla – a much larger company by market cap – made headlines by investing **$1.5 billion** (around 8% of its cash reserves) into Bitcoin. The news sent Bitcoin’s price soaring 20% in a day, and suddenly corporate boardrooms worldwide took note.
Tesla’s move was bold and *public*; the disclosure came via an SEC filing that also announced the company might soon accept Bitcoin for car purchases. Yet Tesla’s approach to holding Bitcoin was more conservative than MicroStrategy’s. A few months after buying in, Tesla sold about 10% of its Bitcoin to “test liquidity,” netting a small profit and proving that it could convert crypto back to cash easily. Later, amid economic uncertainty, Tesla elected to trim a substantial portion of its position to manage risk, leaving a more modest stash on its books.
In the **“tale of two treasuries,”** MicroStrategy showed *diamond hands* – retaining all its bitcoins through volatile swings – whereas Tesla demonstrated *pragmatism*, cashing out part of its holdings when needed.
These two pioneers illustrate the spectrum of execution strategies. A high-reward strategy can just as easily become a high-risk one if the investment is too large relative to the business. Timing and execution matter too. Above all, MicroStrategy and Tesla taught the world that adding Bitcoin to a corporate treasury is *entirely feasible* – but the **degree** and **manner** of execution must align with a company’s profile and risk tolerance.
## Public vs. Private Companies: Different Playbooks
The execution of a Bitcoin strategy will look very different for a **publicly traded company** versus a **privately held one**. Imagine two CEOs, each eager to put Bitcoin on the balance sheet – one answers to public shareholders and regulators, the other to a small group of private owners. Their journeys diverge from the start.
For public companies, **regulatory compliance and transparency** set the ground rules. Any material change in treasury strategy might require board approval and must be disclosed in financial filings. They face *intense scrutiny*: quarterly earnings calls, updated filings, and shareholder reactions.
Yet, being public also has its advantages in execution. A public company typically has greater access to capital markets. It can **raise funds** through equity or debt offerings in ways a private company cannot. Public firms can leverage their higher profile and may even trade at a premium if investors value their Bitcoin holdings highly.
For private companies, the **road is quieter and often smoother** in the short term. Execution can be swift and discreet. **Fewer disclosure requirements** mean a private firm can accumulate a position over time, then reveal it on their own terms (if at all). Governance is simpler.
However, private companies face constraints like **access to capital** and in-house expertise. While they have flexibility, they must still adhere to sound internal governance and prepare for future transparency if they ever plan to go public.
In summary, *public companies must execute with one eye on the market and regulators, while private companies must execute within tighter capital bounds*. Understanding where your company falls on this spectrum is vital as you move from Bitcoin strategy to Bitcoin execution.
## Selecting Vendors and Partners: Setting Up for Success
With a strategy approved and a decision made to buy Bitcoin, the next question is **how** and **with whom** to execute the plan.
### Execution of the Buy
When purchasing a large amount of Bitcoin, *how you buy matters immensely*. Attempting to buy tens of millions of dollars worth of BTC on a regular retail exchange account can result in slippage.
That’s why companies usually turn to **institutional trading desks or OTC (over-the-counter) brokers**. These specialized desks can execute big trades efficiently and discreetly. For instance, when MicroStrategy made its initial $250 million purchase, it worked with Coinbase’s institutional arm (Coinbase Prime) to **quietly accumulate Bitcoin over several days**, using smart algorithms like TWAP.
Tesla’s $1.5 billion buy was similarly executed via Coinbase’s OTC desk.
Experienced partners make this possible: they bring human traders and automated systems that know how to work large orders.
### Safeguarding the Assets
Buying Bitcoin is only half the battle; **storing** it securely is the other half.
Bitcoin is a bearer asset – if you control the private keys, you control the Bitcoin. Companies must either become their own bank or entrust that job to a reliable custodian.
Many corporations opt for regulated third-party custodians due to their lack of in-house crypto expertise. A qualified custodian can provide cold storage, insurance coverage, and audited security procedures.
When selecting a custody partner, vet them as rigorously as you would a bank. Ask about SOC certifications, insurance, key management protocols, and legal protections. Custodians like Coinbase Custody, Fidelity, and BitGo are common choices.
### Other Vendor Considerations
Other vendors may include legal advisors, tax specialists, public relations teams, or technology consultants. But for treasury execution, the critical partners are your **execution desk** and your **custodian**.
Selecting the right vendors is about building an all-star team for your Bitcoin endeavor.
## Ensuring Operational Readiness
Even with great partners, a Bitcoin treasury initiative can falter if your **organization isn’t prepared**.
### Stakeholder Alignment and Approvals
Identify key stakeholders early – from board members to treasury analysts. Present a detailed plan covering strategy, scale, risk, and execution. MicroStrategy held board sessions to ensure buy-in. Tesla changed its investment policy before buying.
Training sessions and internal briefings are essential. Consider appointing a Bitcoin champion internally.
### Policies and Procedures
Develop treasury policies specific to Bitcoin. Define limits, sign-off thresholds, storage protocols, and emergency procedures.
Create standard operating procedures for executing transactions. Dry runs can be useful to identify issues in the workflow.
### Accounting and Compliance
Prepare your finance team. Bitcoin has required impairment-based accounting treatment under GAAP, but **from 2025**, FASB rules allow fair value accounting. This means gains and losses can now be reflected quarterly.
Involve your auditors early. Also ensure your legal team prepares disclosures (especially if you're public) and clarifies tax implications.
### Training and Culture
Assign champions, create shared documentation, and demystify Bitcoin. A new asset class introduces new skills. Education builds confidence and reduces mistakes.
## After the Purchase: Managing a Bitcoin Treasury
Once Bitcoin is purchased, your journey isn’t over. You’ve lit the fire – now you must tend it.
### Security and Access
Whether using a custodian or self-custody, maintain strict access control. Rotate credentials as personnel change. Test backup procedures regularly.
Watch for social engineering attempts and phishing attacks. Awareness is as important as infrastructure.
### Treasury Integration and Monitoring
Monitor your Bitcoin holdings like any major asset. Track cost basis, market value, and risk exposure. Create internal alerts or thresholds for action reviews – e.g., “if Bitcoin falls 30%” or “if holdings exceed 20% of treasury”.
Some firms consider Bitcoin a reserve of last resort; others use it more actively. In rare cases, Bitcoin can be used as collateral for loans – though caution is advised.
### Reporting and Investor Communication
For public companies, include Bitcoin details in financial statements. Show both cost basis and market value. Prepare talking points for quarterly calls.
Private companies should still report internally. Transparency with shareholders (however few) builds trust.
### Evolving the Strategy
Keep up with regulatory changes, insurance options, custody improvements, and new use cases. Bitcoin may lead to strategic partnerships or operational innovations.
Integrate Bitcoin into broader corporate reviews. Like any treasury asset, it should be evaluated regularly.
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## Closing Thoughts
Executing a Bitcoin strategy isn’t just about the buy. It’s a long-term commitment – from partner selection and internal prep to post-purchase risk management and reporting.
Tesla and MicroStrategy proved that Bitcoin can fit on a corporate balance sheet. But they also showed the importance of execution. The best strategies falter with poor execution. With strong foundations, sound vendors, clear governance, and engaged teams, your company can convert ambition into resilient action.
Welcome to the other side of the orange coin.