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Bitcoin’s relative and increasing underperformance since 2020 isn’t particularly difficult to explain.

This was the period when the Financial Industrial Complex (FIC) began aggressively paperising Bitcoin, a process that has only accelerated since. We’ve seen this exact playbook before with gold and silver. Financial institutions create paper claims on scarce assets, suppressing scarcity and absorbing demand through financial products while accumulating the underlying asset themselves. Once accumulation is largely complete, as was the case with gold and silver, ultimately for central banks, the asset is then allowed to reprice.

History is cyclical. Look at the balance sheets of the world’s largest institutions. Time and again, they end up owning the scarce underlying assets; gold, land, energy infrastructure, commodities, prime real estate, and now increasingly Bitcoin, while the public is sold the securities and paper claims built around them. The paper funds the accumulation. The real asset captures the value. Bitcoin is simply the latest asset to enter this cycle.

The implications are straightforward. As these paper claims expand at a faster rate than the underlying asset itself, dilution becomes structural rather than incidental, gradually widening the gap between perceived exposure and actual Bitcoin ownership.

This is why I believe the current generation of Bitcoin treasury companies (Treasury 1.0’s), which are built around perpetual share issuance and financial engineering, ultimately face structural limitations.

Bitcoin was created to eliminate dilution risk, counterparty risk, and dependence on trusted intermediaries, yet Treasury 1.0 models reintroduce all three through perpetual share issuance, leverage, and management risk.

The irony is that many investors are buying exposure to Bitcoin specifically because of the problems it solves, while simultaneously accepting structures that recreate those same problems in a different form.

What interests me far more is what comes next.

I believe there is a correct way to integrate Bitcoin into capital markets, but it won’t be built on perpetual issuance, financial engineering, or endless dilution. It will emerge as the market learns the limitations of Treasury 1.0 models, as those structures approach their mathematical ceilings, and as builders continue developing Bitcoin’s utility layer and real-world economic value proposition.

The future belongs to Bitcoin-native operating models: productive, non-dilutive, open-source, non-custodial businesses that are aligned with Bitcoin itself. These businesses will not treat Bitcoin as a passive reserve asset. They will treat Bitcoin as money. They will generate value through infrastructure, utility, and economic activity, earning Bitcoin rather than continuously issuing paper claims against it.

This is the foundation of the Treasury 2.0 framework developed by @shoneanstey.

Importantly, Treasury 2.0 is not a theoretical concept. The framework was published only eight months ago and is already being actively implemented through his public company, while a growing number of others are beginning to also adopt his proposed framework. Unsurprisingly, many of the people moving in this direction tend to be OG Bitcoiners and builders rather than suitcoiners whose solution to every problem begins and ends with another layer of financial engineering.

At its core, the framework is simple: Build businesses that directly contribute to Bitcoin’s network growth, generate cash flows in sats through productive economic activity, and create mechanisms to return that value to shareholders. A properly designed Bitcoin treasury company should strengthen the network itself, generate Bitcoin without relying on dilution, enable shareholders to participate in Bitcoin-denominated cash flows, and ultimately create a pathway toward Bitcoin-native dividend products.

Imagine a public company providing shareholders with dedicated Bitcoin or Lightning wallets and distributing dividends directly in sats from operating cash flows generated on Bitcoin infrastructure. That is not financial engineering. That is real economic activity occurring on top of the Bitcoin network. This is what the Treasury 2.0 framework enables and promotes.

To be clear, I am not writing this to promote any particular company. I am writing this to promote the framework, because as a Bitcoiner who has spent a long time studying Bitcoin, capital markets, and this sector, I genuinely believe Treasury 2.0 represents the correct path forward for Bitcoin in public markets.

My hope is that more Bitcoiners study the framework, understand the structural problem it is attempting to solve, and begin discussing it more openly. It is one thing to provide a Bitcoin-principled critique of the sector. It is far more valuable to provide a Bitcoin-principled solution.

Bitcoin will continue to be financialised and integrated into capital markets whether we like it or not. The question is whether that integration happens according to fiat incentives or Bitcoin incentives.

The fiat approach is Treasury 1.0: perpetual share issuance, dilution, and the importation of value-eroding dynamics from the legacy financial system.

The Bitcoin-native approach is Treasury 2.0: productive businesses, infrastructure, utility, economic activity, and value creation denominated in sats.

Treasury 1.0 treats Bitcoin as collateral for financial engineering. Treasury 2.0 treats Bitcoin as money.

Personally, I believe the direction of travel is inevitable. In the long run, the companies that create the most value will not be those issuing the most paper claims on Bitcoin, but those building directly on the Bitcoin network itself.

I’ll post the link for the Treasury 2.0 white paper in the comments, and I encourage everyone to check the Bitcoin-native companies currently adopting and building it out. If you need help finding them let me know. This is the necessary evolution for the sector, I cannot stress this enough!