Public companies worldwide have been going all-in on Bitcoin (BTC) this year. Whether it’s through equity or debt issuance, firms have accelerated their push to acquire BTC and add it to their balance sheets. While Bitcoin continues to appreciate in value, the firms have also benefited through their stock surge and paper gains.
But the looming question is: What will happen if a bear market returns? Will institutional confidence hold steady, or will it waver in the face of volatility? BeInCrypto spoke to industry experts to examine the possibilities in a potential bear market and whether these firms will contribute to more stability or downfall.
Is Institutional Interest in Bitcoin a Double-Edged Sword?
Over the past few months, BeInCrypto has extensively reported on corporate Bitcoin acquisitions. The trend pioneered by Michael Saylor, co-founder of (Micro) Strategy, has inspired many others to follow suit.
Dean Chen, an analyst at Bitunix, highlighted that the growing influx of institutional capital has solidified Bitcoin’s position as ‘digital gold.’
“In the first seven months of 2025, net inflows into institutional Bitcoin ETFs surpassed $5 billion, and BlackRock’s iShares Bitcoin Trust reached over $85 billion in AUM, contributing to BTC’s 26% year-to-date gain,” Chen told BeInCrypto.
Furthermore, John Glover, Ledn’s Chief Information Officer (CIO), attributed Bitcoin’s reputation for stability in recent years to the increasing involvement of institutions. Glover said that with Bitcoin’s volatility decreasing over time, it is increasingly behaving like a traditional asset.
Nonetheless, as with all traditional assets, the market experiences cycles, with bull markets typically followed by bear markets. He anticipates that any future bear market for Bitcoin will likely be less severe compared to past cycles. Still, corrections are inevitable.
Notably, the executive added that while institutes bring capital, they also bring constraints.
“Fund managers, public companies, pension boards – these actors aren’t driven by ideology. They answer to shareholders. They watch the quarterly performance. And when pressure builds, they sell,” Glover said.
Chen pointed out that institutional investors tend to exit faster than retail investors. Thus, if the market moves in the opposite direction, high-frequency trading funds and quant strategies are likely to sell off their positions.
However, Marcin Kazmierczak, the COO and Co-Founder of Redstone, offered an alternative viewpoint. He noted that while institutional investors might encounter difficulties during bear markets, their involvement has brought advanced risk management practices to the cryptocurrency space.
“Companies with Bitcoin treasuries typically have longer investment horizons than retail traders, which could provide stability even during downturns. The key is that institutional adoption has diversified the holder base, potentially reducing volatility compared to previous cycles,” he mentioned to BeInCrypto.
The Success of Corporate Financing Models for Bitcoin Acquisition
Institutional investors use a mix of financing methods to buy Bitcoin, with debt being the most common one. In a post on X, Redbox Global revealed that Bitcoin-focused companies are facing a significant $12.8 billion debt maturity wall by 2028.
“Marathon Digital and Strategy (led by Michael Saylor) are staring at a massive $12.8 billion debt maturity wall by 2028, threatening their survival. While these companies hold over 725,000 BTC collectively, many rely heavily on debt and stock sales to fund purchases, despite losing millions each quarter. Convertible debt helps for now, but falling share prices could force fire sales of Bitcoin or dilutive refinancing,” the post read.
These concerns are not new. Previously, Sygnum Bank and other market analysts have also raised alarms about the sustainability of the strategies.
Chen highlighted that Strategy raised $42.87 billion since 2020 through zero-coupon convertible notes and equity issuances to buy over 600,000 BTC at an average cost of $71,268. This strategy boosts Bitcoin accumulation in bull markets. Nevertheless, it strains finances in bear markets with interest payments and falling stock prices.
Moreover, Strategy’s debt makes up about 24.3% of its capital structure. He added that its convertible bonds may trigger mandatory conversion or redemption if Bitcoin drops below a certain threshold. Other companies like Marathon Digital issue equity before bonds, lowering the leverage. Despite this, they have higher capital costs and limited resilience.
“Studies show that when hedge funds or companies have a debt-to-equity ratio exceeding 30%, and asset prices fall by 20%, the probability of default increases by over 40%. Therefore, companies heavily reliant on debt financing are more exposed to credit risks and forced liquidation during bear markets,” Chen said.
Still, Glover emphasized that companies with strong capital structures—like staggered maturities and low-interest debt—will fare better. He stated that Strategy’s model can handle significant losses. However, new firms face a higher risk of forced sales in a downturn.
“Tesla’s $97 million impairment shows what can happen when Bitcoin just sits idle. If you’re overleveraged and underprepared, a bear market turns a treasury asset into a liability,” he added
Anthony Georgiades, Founder and General Partner at Innovating Capital, also called the strategies a ‘high-stakes play.’
“If BTC drops significantly, highly leveraged firms may struggle to refinance or meet debt obligations. A firm’s heavy reliance on debt could make them vulnerable in a prolonged downturn,” he commented to BeInCrypto.
Meanwhile, Kazmierczak noted that companies using convertible debt strategies have demonstrated innovative ways to balance growth with risk management. According to him, their effectiveness ultimately depends on the strength of their core business and their ability to service debt through operational cash flows, rather than relying purely on Bitcoin appreciation.
He believes smart treasury strategies involve appropriately sizing positions relative to overall balance sheets. Kazmierczak detailed that many public companies holding Bitcoin have demonstrated sound management by treating BTC allocations as a part of their overall reserves.
“Mass selling seems unlikely as it would crystallize losses and go against their stated long-term strategies. Companies like MicroStrategy have weathered previous downturns without selling, suggesting conviction in their approach. The transparency of public companies also means markets can anticipate and price in any potential pressures well in advance,” he affirmed.
What Will Happen to Bitcoin’s Price if Institutions Start Selling?
While the experts showed cautious optimism regarding the financing strategies, centralization is more concerning. As of the latest data from Bitcoin Treasuries, the top three publicly listed Bitcoin treasury companies collectively hold about 695,000 BTC, accounting for 3.31% of the total BTC supply. So, what happens when or more decide to sell?
“When one company holds nearly 3% of the total BTC supply, as Strategy now does, that concentration becomes a market risk. If they’re forced to sell, perhaps due to financing pressure, redemptions, or equity collapse, it could trigger a cascade. Others follow, liquidity dries up, and prices fall faster than fundamentals justify,” Glover explained to BeInCrypto.
He elaborated that hedging options are available in the space, and the liquidity of markets like futures and options continues to grow. Therefore, Glover hopes that BTC treasury companies are strategic in managing their risk to withstand a bear market.
Nonetheless, Bitcoin isn’t the only asset that will be impacted. The decline of the largest cryptocurrency could also lead to a broader market downfall.
The CIO of Ledn stressed that ‘Bitcoin is still the anchor for the entire market.’ He noted that if large holders begin offloading, it sends a message that even the ‘safe’ end of crypto isn’t secure.
“Historical data shows that when BTC-led capital exits the market, altcoins and meme coins tend to experience 2–3x the downside. If treasury companies engage in large-scale BTC sales, a rapid breakdown of key support levels could trigger panic among retail investors, accelerating capital outflows and potentially extending the crypto market’s downtrend by several months or longer,” Chen added.
Factors That Could Influence Companies’ Ability to Hold Bitcoin
Bitcoin and the crypto sector aren’t immune to macroeconomic pressures. Whether it’s President Trump’s tariffs or the Israel-Iran conflict, the market has reacted quickly by going into a free fall.
The experts also outlined factors that are most likely to influence BTC treasury companies’ ability to hold Bitcoin through a bear market.
“When interest rates rise and liquidity gets tight, companies relying on debt to hold Bitcoin often come under pressure. If they can’t refinance at a reasonable cost, things can unravel quickly. Inflation adds another layer of uncertainty. Some view it as a reason to buy and hold Bitcoin, while others see it as a sign to pull back. It all depends on how the market mood shifts. The firms that come through won’t just be the ones holding the most BTC. They’ll be the ones that have built strong risk management into their operations,” Glover shared with BeInCrypto.
Furthermore, Bitunix’s Chen also revealed that regulatory factors could play an important role. According to him, the Clarity Act could reduce compliance costs for institutions, thereby supporting long-term Bitcoin holdings by treasury firms.
Besides this, shareholder pressure is another key factor to consider. Chen explained that if Bitcoin crashes, coordinated shareholder actions—such as calling a special meeting—could force the board to adopt a more conservative strategy and liquidate assets to reduce risk.
“If a company’s stock drops by over 50% due to a BTC price crash, investors may use proxy voting or public pressure to demand asset liquidation to protect capital. For instance, MicroStrategy’s lead short-seller Gus Gala once publicly urged the company to sell BTC, citing ‘shareholder pain from the 8% annual preferred dividend.’ Moreover, if a company’s stock price falls below its convertible bond strike price, creditors may legally push for early redemption, intensifying pressure to sell BTC,” he conveyed.
Despite this, Glover stresses that a potential bear market wouldn’t erase Bitcoin. However, it will serve as a crucial test for institutional conviction in the asset.
The post Public Companies’ Bitcoin Bet: Can They Weather the Bear Market Storm? appeared first on BeInCrypto.