Nasdaq-listed Bitcoin treasury company Nakamoto Inc. has detailed an actively managed Bitcoin derivatives program designed to turn BTC’s volatility into recurring income while hedging part of its downside risk. The program has been in place since the first quarter of 2026 and uses a portion of the company’s Bitcoin as collateral within a separately managed account overseen by Bitwise Asset Management.
Under the setup, part of Nakamoto’s Bitcoin is held in Kraken’s qualified custody solution and deployed into the derivatives strategy. The structure allows the firm to retain core exposure to Bitcoin while using derivatives to extract yield and offset market risk, without relying on outright asset sales.
Within the separately managed account, Nakamoto and Bitwise jointly run a portfolio of listed and over-the-counter Bitcoin-linked derivatives under a single mandate that caps notional exposure as a percentage of total BTC holdings and sets guardrails on instruments, counterparties, and tenor. The structure is split into two sleeves: on the income side, Nakamoto writes covered calls and call spreads against a defined portion of its Bitcoin holdings to convert implied volatility into recurring premium income. On the hedging side, it buys protective puts and put spreads against a defined portion of its Bitcoin holdings to reduce the company’s mark-to-market exposure to adverse Bitcoin price movements over defined time horizons.
Nakamoto noted that premiums may be received in either Bitcoin or U.S. dollars and can be reinvested in the company’s Bitcoin treasury, applied against operating costs (including interest expense), or retained as working capital. Performance figures for Q1 2026 will be disclosed in its next 10-Q filing.
The move reflects increasing pressure on Bitcoin treasury companies as prolonged price weakness weighs on balance sheets. Bitcoin is down around 38% from its October 2025 peak of $126,198 and was trading near $78,151 at the time of reporting. Falling prices have reduced the value of corporate crypto reserves, forcing firms to explore alternatives to liquidation.
“Bitcoin's implied volatility is one of the most persistently mispriced assets in capital markets,” wrote Tyler Evans, chief investment officer of Nakamoto and UTXO Management, adding that the framework seeks to “harvest that premium systematically, at scale, and convert that opportunity into long-term value for shareholders.”
Nakamoto’s stock performance reflects the pressure. Shares were trading around $0.22, down about 4.5% on the day and roughly 46% year-to-date.
Other firms have taken more direct steps to manage financial pressure. Genius Group liquidated its entire Bitcoin treasury of 84 BTC for about $5.7 million in February to repay debt obligations. Empery Digital followed with a sale of 357.7 BTC at an average price of $66,632, generating about $24.7 million in proceeds.
The shift toward derivatives-based treasury management highlights a broader evolution in how institutions approach Bitcoin exposure. Holding large reserves without hedging is becoming harder to justify in volatile markets, particularly for publicly listed firms with shareholder expectations. Programs that combine custody, collateral management, and derivatives execution are likely to become more common as firms seek to stabilize returns and reduce earnings volatility tied to crypto price swings.
