Bitcoin treasury challenges could force mergers as BTC slides from $126K

The growing world of Bitcoin treasury companies is facing a stress test it didn’t fully anticipate. Speaking at BTC Prague, Strive Chief Investment Officer Ben Werkman warned that prolonged Bitcoin price weakness is putting real pressure on firms that built their strategies around debt-funded accumulation — and that the Bitcoin treasury challenges ahead could force some of them to restructure, merge, or sell holdings they never intended to touch.

Key takeaways

• Strive CIO Ben Werkman warns that prolonged Bitcoin weakness may push treasury firms with convertible debt toward restructuring or consolidation.
• Strive avoided convertible bonds entirely, relying on equity financing, which has allowed it to keep expanding through the current downturn.
• Strive’s acquisition of Semler Scientific is cited as an early sign of sector-wide consolidation.
• Strategy sold just 32 BTC to demonstrate Bitcoin’s liquidity to credit markets and rating agencies — not to fund operations — while simultaneously purchasing 1,587 BTC to bring total holdings to 846,842 BTC.
• Rating agencies currently treat Bitcoin on treasury balance sheets as having effectively zero credit value, creating ongoing financing challenges for the sector.

Bitcoin Downturn Pressures Treasury Firms to Restructure or Consolidate

The core issue is straightforward but uncomfortable: many Bitcoin treasury companies raised capital through convertible bonds during a period when BTC was trading near its October 2025 peak of around $126,000. With prices now well below that level, the math on servicing that debt gets harder with every passing month.

Werkman was direct about the consequences. An extended downturn doesn’t just erode paper value — it forces operational decisions. Firms may need to sell Bitcoin to cover debt obligations or fund day-to-day operations, particularly where financing arrangements include collateral or coverage requirements. That’s the opposite of what a treasury accumulation strategy is supposed to do.

Convertible Debt Increases Vulnerability

The distinction between debt-funded and equity-funded treasury strategies matters enormously right now. Companies that leaned heavily on convertible bonds during Bitcoin’s bull run built structures that assumed continued price appreciation — or at least price stability. Neither has materialized.

When Bitcoin prices drop significantly, those firms face a compounding problem: the asset backing their strategy loses value at the same time that debt servicing costs remain fixed. That squeeze is what Werkman sees as the trigger for potential consolidation across the sector.

Strive’s Equity-Financing Approach Supports Growth

Strive took a different path. Werkman noted that the firm was “one of the only ones that didn’t take any convertible bonds” when constructing its Bitcoin treasury strategy, relying instead on equity financing. That structural decision has given Strive more room to maneuver — continuing to expand even as competitors with heavier debt loads feel squeezed.

It’s worth noting that Werkman’s comments reflect Strive’s own positioning, which gives the firm a natural interest in highlighting the risks of convertible debt. But the underlying mechanics he describes are real and apply broadly to the sector.

Consolidation Trends Evidenced by Strive’s Acquisition of Semler Scientific

The clearest signal of what sector consolidation might look like is already on the table. Strive’s acquisition of Semler Scientific — itself a Bitcoin treasury company — points to a model where financially constrained firms seek exits through mergers rather than trying to outlast a prolonged downturn independently.

Market Weakness Drives Merger Considerations

Werkman acknowledged that deal activity has been limited so far, partly because company leaders are reluctant to sell at discounted valuations. That hesitation is understandable but may not be sustainable indefinitely if Bitcoin remains under pressure. The firms most likely to pursue or accept merger talks are those where the financing constraints have become most acute.

Semler Deal Motivated by Shared Financing Models

The Semler Scientific deal came together for a specific reason: Semler Scientific Chairman Eric Semler supported the preferred-stock model that Strive had been developing, even though that same model had failed to gain enough shareholder support at Semler itself. That alignment on financing philosophy — rather than desperation alone — drove the transaction. It suggests future consolidation won’t simply be distressed asset sales; strategic and philosophical compatibility will matter too.

Balance Sheet Restructuring and Liquidity Management Among Treasury Companies

Not every firm under pressure is waiting for a merger. Nakamoto is actively restructuring its balance sheet to reduce debt and recover operating flexibility — an attempt to unwind financing constraints that accumulated during more favorable market conditions. Werkman cited Nakamoto’s moves as a sign that parts of the sector are already adapting rather than holding still.

Strategy’s Bitcoin Sales Demonstrate Liquidity

Strategy recently sold 32 BTC at an average price of $77,135 per coin, generating roughly $2.5 million. The move drew immediate attention given the company’s long-standing commitment to accumulation, with some observers interpreting it as a retreat from that strategy.

Company executives pushed back firmly. Strategy CEO Phong Le said the sale was a test of internal systems, not a cash-generation move for dividend payments. Werkman framed it differently but reached the same conclusion: the sale was a proof-of-concept for credit markets.

The reasoning matters. Rating agencies currently treat Bitcoin on Strategy’s balance sheet as having effectively zero value when assessing creditworthiness. Under that framework, a company holding hundreds of thousands of BTC still gets rated as though that asset doesn’t exist. Demonstrating the ability to sell Bitcoin and convert it into cash — cleanly and at scale — becomes a way of pushing back against that credit assessment methodology.

Werkman put it plainly: occasional Bitcoin sales help prove Bitcoin’s resilience as a treasury asset rather than undermine the long-term accumulation strategy. You can’t claim an asset is liquid and then never use it.

Strategy Keeps Accumulating Despite the Noise

The 32 BTC sale didn’t slow Strategy’s core program. On June 15, Michael Saylor announced that the company had purchased 1,587 BTC for approximately $100 million, raising total holdings to 846,842 BTC. Simultaneously, Strategy expanded its USD reserves by $100 million, bringing total dollar reserves to $1.1 billion.

That combination — small, deliberate Bitcoin sales to demonstrate liquidity alongside large continued purchases — reflects a more sophisticated treasury management approach than simple accumulation. It’s a response to the credit rating problem: showing lenders and investors that the company can access Bitcoin’s value when needed, while making clear that the long-term conviction hasn’t shifted.

The broader implication for the sector is significant. If treasury firms can successfully shift how rating agencies value Bitcoin on balance sheets — even partially — it would substantially reduce their financing costs and widen access to capital markets. That’s a structural change that would benefit every company in the space, not just Strategy. For now, that battle is still being fought one transaction at a time.

FAQ

Why might Bitcoin treasury firms need to restructure or consolidate?

Prolonged Bitcoin price weakness puts firms with debt-funded accumulation strategies under particular strain. Companies that relied on convertible bonds assumed continued price support; when prices fall significantly below levels like the October 2025 peak near $126,000, debt servicing becomes harder and firms may be forced to sell Bitcoin to cover obligations or consider merging with stronger partners to survive.

How has Strive avoided financial pressure amid the Bitcoin downturn?

Strive avoided convertible bonds entirely when building its Bitcoin treasury strategy, relying instead on equity financing. That approach leaves the company without the fixed debt servicing obligations that are squeezing competitors, allowing it to continue expanding through the current market weakness.

What was the purpose behind Strategy selling 32 BTC recently?

Strategy sold 32 BTC at an average price of $77,135 to demonstrate Bitcoin’s liquidity to credit markets and rating agencies — not to fund dividends or operations. The sale was described internally as a test of systems. Strive’s Werkman noted it serves a broader purpose: proving that Bitcoin can be converted to cash, which matters because rating agencies currently treat Bitcoin on treasury balance sheets as having zero credit value.

How do rating agencies value Bitcoin assets on treasury companies’ balance sheets?

Rating agencies often discount Bitcoin’s value to zero when assessing the creditworthiness of treasury firms, meaning a company holding hundreds of thousands of BTC may receive no credit benefit from those holdings. This creates a significant challenge for Bitcoin treasury companies seeking financing, and is one reason firms like Strategy are actively trying to demonstrate Bitcoin’s liquidity through occasional, strategic sales.

Article produced with the assistance of artificial intelligence and reviewed by the editorial team.