Corporate Bitcoin Treasuries Hide Hidden Conditional Supply Risks
CleanSpark's $2 billion corporate Bitcoin treasury is a ticking time bomb of hidden conditional supply, according to recent filings.
The company's strategy for selling options around ongoing sales from its corporate Bitcoin treasury, called Spot+, shows that even when companies report their holdings, the actual economic exposure can be much higher due to various contracts and loans. During the three months ending June 30, CleanSpark put 9,400 Bitcoin-equivalent call contracts through Spot+, generating $8.017 million in premium proceeds.
This is not an isolated case, as other companies like PowerCompute and USBC have similar arrangements that can lead to conditional supply. For example, PowerCompute entered a collar loan secured by 307 Bitcoin at 6.5% annual interest, with a floor of $71,112, a ceiling of $75,000, and a knock-in barrier of $93,500. If the reference price is below the barrier, the cap knocks in and appreciation above $75,000 becomes payable to the lender.
The filings highlight the complexities of corporate Bitcoin treasuries and the need for accurate disclosure. The companies' treasuries can look permanent even when part of their economics already belongs to a contract. This has significant implications for investors and analysts trying to understand the true economic exposure of these companies.