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\n\t\t\t\t\t\t\t\t\tConvertible bonds offer cheap capital but carry refinancing risk, upfront short-selling, and multi-year overhangs.\t\t\t\t\t\t\t\t<\/p>\n<\/p><\/div>\n
An analyst has warned that the real risk to Bitcoin Treasury Companies (BTCTCs) isn\u2019t the price volatility currently being experienced in the market, but rather how their acquisitions are funded.<\/p>\n
According to H100 Group\u2019s Bitcoin lead, Brian Brookshire, convertible bonds, while often attractive, represent a significant and underappreciated threat to corporate Bitcoin strategies.<\/p>\n
In a recent post on X, Brookshire laid out<\/a> the menu of financing tools available to Bitcoin treasury firms and highlighted why they can be dangerous if misused.<\/p>\n Convertible bonds sit at the center of that anxiety. They allow companies to raise funds at a premium to spot share prices, as seen<\/a> with UK-listed The Smarter Web Company\u2019s \u201cSmarter Convert\u201d instrument, fully subscribed for $21 million and structured as a Bitcoin-denominated convertible.<\/p>\n \u201cConvertible bonds can have quite favorable terms when issued under the right market conditions,\u201d Brookshire wrote, \u201cbut have refinancing risk, are often accompanied by large upfront short-selling, and can take up to 5 years to be discharged.\u201d<\/p>\n<\/blockquote>\n For those trying to copy Strategy\u2019s treasury playbook, that\u2019s a direct warning: the very instruments that helped accelerate BTC accumulation can quietly box companies into a corner when markets turn.<\/p>\n Paris-based Sequans exemplified<\/a> this by becoming the first major treasury to liquidate a portion of its holdings, selling 970 BTC for $93 million.<\/p>\n \u201cIt 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,\u201d added the market observer.<\/p>\n<\/blockquote>\n 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> a $12.8 billion debt maturity wall for BTC-focused companies, much of it in convertible notes clustered in 2027\u20132028.<\/p>\n 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.<\/p>\n Recent activity shows how entrenched the BTC corporate playbook has become. Despite Strategy\u2019s mNAV multiple slipping from 1.52x to about 1.11x, Executive Chairman Michael Saylor has told<\/a> Fox Business that his company is engineered to withstand an 80\u201390% drawdown in the price of Bitcoin.<\/p>\n On November 17, the firm disclosed<\/a> its biggest purchase since July, worth over $830 million, refuting rumors that it had been selling off its stash.<\/p>\n 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\u2019s announcement<\/a> 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.<\/p>\n\n
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