An analyst has issued a warning that the primary risk facing Bitcoin Treasury Companies (BTCTCs) is not the current market price volatility, but rather the methods used to fund their acquisitions. Brian Brookshire, Bitcoin lead at H100 Group, has identified convertible bonds as a significant and often underestimated threat to corporate Bitcoin strategies, despite their frequent attractiveness.
Capital Structure Takes Center Stage as BTCTCs Expand BTC Bets
Brookshire detailed the range of financing tools available to Bitcoin treasury firms in a recent post on X, emphasizing the potential dangers of their misuse. Convertible bonds are at the core of this concern. These instruments allow companies to raise capital at a premium to their current share prices. An example of this is the "Smarter Convert" instrument issued by UK-listed The Smarter Web Company, which was 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.”
This serves as a direct caution to those attempting to replicate the treasury strategy of companies like MicroStrategy. The financial instruments that may have initially facilitated accelerated Bitcoin accumulation can inadvertently create difficult situations for companies when market conditions change.
Paris-based Sequans serves as an illustration of this challenge. The company became 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.
These remarks follow an increase in scrutiny regarding corporate Bitcoin leverage. A report from Keyrock earlier in the year projected a $12.8 billion debt maturity wall for BTC-focused companies by 2028, with a substantial portion of this debt consisting of convertible notes maturing between 2027 and 2028. If the equity prices fall below the conversion levels, issuers might be compelled to sell their Bitcoin holdings or accept unfavorable refinancing terms, potentially leading to a downward spiral for both share prices and the cryptocurrency.
Market Tests Leverage and mNAV Premiums
Recent market activity highlights the established nature of the corporate Bitcoin strategy. Despite a decline in MicroStrategy's market capitalization to net asset value (mNAV) multiple from 1.52x to approximately 1.11x, Executive Chairman Michael Saylor stated to Fox Business that the company is structured to endure an 80–90% drawdown in Bitcoin's price.
On November 17, MicroStrategy disclosed its largest purchase since July, valued at over $830 million, thereby countering rumors of asset sales.
In Asia, Tokyo-listed Metaplanet has expanded its Bitcoin holdings to 30,823 BTC as of November 19, 2025, following a series of acquisitions. Concurrently, WiseLink's announcement in August of a three-year convertible note with Nasdaq-listed Top Win International marked the first Bitcoin treasury strategy by a Taiwan-listed firm, also utilizing convertible notes to finance its Bitcoin exposure.