Strive CIO warns Bitcoin firms: convertible debt could backfire if crypto stays flat

Strive CIO Ben Werkman warns Bitcoin treasury companies that the popular funding playbook—issuing convertible debt to buy Bitcoin—may be a serious risk if crypto prices remain depressed or simply move sideways for a long period. Werkman’s core point is mechanics-driven. Convertible bonds give companies cheaper capital because investors expect a stock upside that makes conversion attractive. But if equity prices don’t rise above conversion thresholds, companies must repay the debt in cash when instruments mature—creating “ticking-clock” repayment pressure. He highlights that Bitcoin treasury firms have increased convertible bond issuance, while the equity volatility of companies like Strategy (formerly MicroStrategy) can amplify drawdowns. In that scenario, cheap financing can turn into expensive debt service or outright repayment stress. As an alternative, Strive says it has avoided convertible debt entirely, using PIPE financing and preferred stock structures (including “SATA shares”). The trade-off is potential shareholder dilution, but Werkman argues dilution is preferable to solvency risk tied to near-term cash maturities. Strive’s actions support the stance: in January 2026 it retired about $110M of Semler Scientific debt (including $90M of 4.25% convertible senior notes due 2030) and bought 333.89 BTC at an average cost near $89,851 per coin. Strive’s total holdings are now 13,131.82 BTC. For crypto traders, the key takeaway is that “convertible debt” is becoming a central risk filter for Bitcoin treasury stock selection, potentially affecting equity volatility even if BTC itself is stable.