Convertible bonds offer cheap capital but carry refinancing risk, upfront short-selling, and multi-year overhangs.
An analyst has warned that the real risk to Bitcoin Treasury Companies (BTCTCs) isn’t the price volatility currently being experienced in the market, but rather how their acquisitions are funded.
According to H100 Group’s Bitcoin lead, Brian Brookshire, convertible bonds, while often attractive, represent a significant and underappreciated threat to corporate Bitcoin strategies.
Capital Structure Takes Center Stage as BTCTCs Expand BTC Bets
In a recent post on X, Brookshire laid out the menu of financing tools available to Bitcoin treasury firms and highlighted why they can be dangerous if misused.
Convertible bonds sit at the center of that anxiety. They allow companies to raise funds at a premium to spot share prices, as seen with UK-listed The Smarter Web Company’s “Smarter Convert” instrument, fully subscribed for $21 million and structured as a Bitcoin-denominated convertible.
“Convertible bonds can have quite favorable terms when issued under the right market conditions,” Brookshire wrote, “but have refinancing risk, are often accompanied by large upfront short-selling, and can take up to 5 years to be discharged.”
For those trying to copy Strategy’s treasury playbook, that’s a direct warning: the very instruments that helped accelerate BTC accumulation can quietly box companies into a corner when markets turn.
Paris-based Sequans exemplified this by becoming the first major treasury to liquidate a portion of its holdings, selling 970 BTC for $93 million.
“It is absolutely crucial for BTCTC management to be well versed in the tradeoffs, think with a long-term view about how the usage of any particular instrument will impact the health of the business, and only issue debt or deploy a particular strategy when terms are favorable to the long-term interests of shareholders,” added the market observer.
His comments come in the wake of rising scrutiny on corporate Bitcoin leverage, with a report by Keyrock from earlier in the year projecting a $12.8 billion debt maturity wall for BTC-focused companies, much of it in convertible notes clustered in 2027–2028.
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If equity prices fall below conversion levels, issuers may be forced to sell their Bitcoin or accept harsh refinancing terms, potentially dragging both share prices and the cryptocurrency lower in a feedback loop.
Market Tests Leverage and mNAV Premiums
Recent activity shows how entrenched the BTC corporate playbook has become. Despite Strategy’s mNAV multiple slipping from 1.52x to about 1.11x, Executive Chairman Michael Saylor has told Fox Business that his company is engineered to withstand an 80–90% drawdown in the price of Bitcoin.
On November 17, the firm disclosed its biggest purchase since July, worth over $830 million, refuting rumors that it had been selling off its stash.
In Asia, Tokyo-listed Metaplanet has increased its holdings to 30,823 BTC as of November 19, 2025, following a series of acquisitions. Meanwhile, WiseLink’s announcement in August of a three-year convertible note to Nasdaq-listed Top Win International marked the first Bitcoin treasury strategy by a Taiwan-listed firm, again leaning on convertibles to finance BTC exposure.
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