Corporate Debt Clock Ticks for Bitcoin Treasuries

The debt clock is ticking for corporate Bitcoin treasuries, which could force billions of dollars back onto the market. According to Matthew Sigel, head of digital assets research at VanEck, many companies have taken on debt and issued preferred stock to finance their Bitcoin holdings.

These treasuries are structured with various claims, including creditors expecting repayment, preferred shareholders seeking distributions, lenders holding pledged coins, common shareholders wanting buybacks, and an operating business that needs cash to run. A payment, redemption, or maturity can force a company to sell its Bitcoin on a fixed date, regardless of whether it still believes in the asset's long-term price.

One example is Bitdeer, which sold all of its 1.3 million BTC in February to fund a pivot into AI data centers. Another example is Strategy, which has been struggling with its variable-rate perpetual preferred stock (STRC). STRC traded below par in June and July, forcing Strategy to sell 32 BTC for about $2.5 million to fund distributions.

Strategy's 843,738 BTC supports a capital structure containing $6.7 billion in convertible notes, $15.5 billion in preferred stock, and $871 million in cash. To address the issue, Strategy announced a Digital Credit Capital Framework, which raised STRC's dividend to 12% and added a ratchet that lifts the rate another 0.5 percentage points each time the stock closes below $95.

Other companies, such as MARA and KULR, have also sold their Bitcoin holdings to meet maturities, preferred distributions, and collateral pressure. The sector has accumulated billions in debt and preferred financing, with maturities concentrated in 2027 and 2028. If refinancing gets difficult, mNAV discounts persist, and convertibles stay out of the money as Bitcoin weakens, calendar-driven selling could climb to 6% to 10% of public-company holdings.