Ben Werkman, Chief Investment Officer at Strive, cautioned at BTC Prague that a prolonged slump in Bitcoin prices could force treasury-focused companies to reconsider their financial strategies. Firms that accumulated Bitcoin using convertible debt may face heightened pressure if the cryptocurrency remains well below its peak near $126,000.
Werkman noted that while rising Bitcoin values would alleviate many issues, an extended downturn could compel some companies to sell their Bitcoin holdings to cover operating costs or service debt. This is especially true for firms with financing agreements tied to collateral or coverage requirements. He highlighted that Strive avoided convertible bonds entirely, relying instead on equity financing, which has allowed the firm to continue expanding without similar strain.
Consolidation in the sector is a likely outcome if market weakness persists, according to Werkman. He pointed to Strive’s acquisition of Semler Scientific as an example of how mergers could help financially constrained firms. However, he acknowledged that company leaders are often hesitant to sell at reduced valuations, which has limited such deals so far. The Semler transaction succeeded because its Chairman supported Strive’s preferred-stock model, even though it lacked sufficient shareholder backing at Semler itself.
Other firms are already adjusting their balance sheets. Werkman mentioned Nakamoto’s efforts to reduce debt and restore operational flexibility, describing these moves as attempts to escape financing constraints built up during more favorable market conditions.
Recent events at Strategy have fueled debate about the balance between Bitcoin accumulation and shareholder obligations. The firm sold 32 BTC earlier this month, raising around $2.5 million at an average price of $77,135. While some interpreted this as a shift in strategy, Strategy CEO Phong Le clarified that it was a test of internal systems, not a cash-raising move. He emphasized that the company still has access to equity and preferred stock funding.
Werkman defended the sale, arguing that it demonstrated Bitcoin’s liquidity to credit markets and rating agencies. He noted that rating agencies currently assign Strategy a credit rating that effectively treats its Bitcoin holdings as worthless. Proving the ability to convert Bitcoin into cash is therefore crucial for firms with dividend obligations. He stressed that companies cannot build balance sheets around a single asset while refusing to ever use it; occasional sales help show Bitcoin’s resilience as a treasury asset.
Despite the sale, Strategy continued accumulating. On June 15, Michael Saylor announced the purchase of 1,587 BTC for $100 million, bringing total holdings to 846,842 BTC, with dollar reserves at $1.1 billion. This follows a purchase of 1,550 BTC earlier in June, showing the firm’s ongoing commitment to its accumulation strategy while also boosting liquidity.