Convertible Bonds Threat to Bitcoin Corporate Bonds, Exec Warns

Convertible bonds offer cheap capital, but come with refinancing risks, upfront short-selling and multi-year overhang.

An analyst has warned that the real risk to Bitcoin Treasury Companies (BTCTCs) is not the price volatility currently experienced in the market, but rather the way their acquisitions are financed.

According to H100 Group Bitcoin leader Brian Brookshire, convertibles, while often attractive, pose a significant and underappreciated threat to companies’ Bitcoin strategies.

Capital structure takes center stage as BTCTCs expand BTC betting

In a recent post on X, Brookshire constructed the menu of financing tools available to Bitcoin treasury companies and highlighted why they can be dangerous if misused.

Convertible bonds are at the heart of that fear. They allow companies to raise money at a premium to spot rates, as evidenced by The Smarter Web Company’s UK-listed “Smarter Convert” instrument, which is fully subscribed for $21 million and is structured as a Bitcoin-denominated convertible.

“Convertible bonds can have quite favorable terms if issued under the right market conditions,” Brookshire wrote, “but they involve refinancing risk, often involve large upfront short-selling, and can take up to five years to redeem.”

For those trying to copy Strategy’s treasury playbook, that’s an immediate warning: the very tools that have helped accelerate BTC accumulation could quietly push companies into a corner when markets turn.

Following from Paris illustrated This by becoming the first major treasury to liquidate some of its assets, selling 970 BTC for $93 million.

“It is absolutely crucial that BTCTC management is well informed about the trade-offs, takes a long-term view on how the use of a particular instrument will impact the health of the company, and only issues debt or adopts a particular strategy when the terms are favorable to the long-term interests of shareholders,” the market watcher added.

His comments come in the wake of increasing attention to Bitcoin’s corporate leverage, with a Keyrock report from earlier this year projecting a $12.8 billion debt wall for BTC-focused companies, much of it clustered in convertible bonds in 2027-2028.

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If stock prices fall below the conversion level, issuers could be forced to sell their Bitcoin or accept harsh refinancing terms, potentially dragging both stock prices and the cryptocurrency into a feedback loop.

Market Tests Leverage and mNAV Premiums

Recent activity shows how entrenched BTC’s corporate playbook has become. Despite Strategy’s mNAV multiple falling from 1.52x to around 1.11x, executive chairman Michael Saylor told Fox Business that its business is designed to withstand an 80-90% drop in the price of Bitcoin.

On November 17, the company announced its largest purchase since July, worth more than $830 million, disproving rumors that it had sold off its stock.

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 August announcement of a three-year convertible bond to Nasdaq-listed Top Win International marked the first Bitcoin treasury strategy from a Taiwan-listed company, which again leaned on convertible bonds to fund BTC exposure.