Many corporations have adopted a straightforward playbook for accumulating Bitcoin: issue convertible debt, purchase Bitcoin, and repeat this cycle. However, Ben Werkman, the Chief Investment Officer of Strive, has identified a critical flaw in this strategy.
During a recent podcast, Werkman articulated concerns regarding the popular financing method that Bitcoin treasury companies have embraced. His argument centers on the risks associated with convertible debt, especially in a market where cryptocurrency prices are stagnant or declining. The maturity timelines associated with such financial instruments can place undue pressure on companies, especially if they struggle to repay this debt amidst low crypto prices.
#What Are the Risks of Convertible Debt for Bitcoin Companies?
Understanding convertible bonds is essential to grasping the challenges faced by these companies. Typically, convertible bonds allow investors to exchange their debt for equity at a later date, often at a price higher than the current valuation of company shares. This type of capital is attractive to companies as it generally comes with lower interest rates due to investor expectations that the company's stock will appreciate. If the stock fails to rise as anticipated, however, the company must repay the debt in cash, placing significant financial strain on its operations.
Werkman highlighted that many Bitcoin treasury firms have increasingly relied on convertible bonds, making their financial situations more precarious. This reliance becomes even more troublesome as the prices of cryptocurrencies fluctuate. Specifically, when Bitcoin prices fall, the related equity prices often drop even more dramatically, creating a scenario where companies find themselves in a challenging position when their stocks slide below conversion thresholds. This scenario transitions what may have seemed like inexpensive financing into an expensive liability.
#How Is Strive Transitioning Away From Convertible Debt?
Strive has taken a different route by completely avoiding the issuance of convertible debt. Instead, the company favors financing methods like Private Investment in Public Equity (PIPE) and preferred stock options, including unique instruments known as SATA shares. These options do not involve stringent repayment schedules tied to specific deadlines, providing Strive with more flexibility. While such instruments may lead to greater dilution of existing shares, Werkman believes that avoiding insolvency is a far more favorable outcome.
To illustrate this strategy in action, Strive recently retired over $110 million in debt while simultaneously acquiring more Bitcoin. In January 2026, the company purchased 333.89 BTC at an average price of around $89,851 each. Today, Strive's total Bitcoin holdings consist of approximately 13,131.82 BTC, positioning it among the top ten corporate holders of Bitcoin in the public market.
#Why Does Werkman's Background Matter?
Werkman's November 2025 appointment as CIO brings significant experience in managing distressed credit and treasury strategies, which he honed during his previous roles at Swan Bitcoin and NumerisX. This expertise is shared by Strive’s leadership team, comprising seasoned Bitcoin treasury executives, enhancing the firm’s cautious yet committed investment approach.
#What Does This Mean for Investors?
The growing concern over the implications of convertible debt is becoming increasingly crucial for investors to consider when assessing Bitcoin treasury firms. When evaluating these companies, it is vital to analyze their capital structures alongside their Bitcoin holdings. A firm with a substantial Bitcoin reserve and looming convertible debt maturities represents a different risk profile than a peer with fewer crypto assets but no pressing debt obligations.
Strive's alternative financing strategy offers a viable model showcasing how businesses can build significant Bitcoin portfolios—now totaling over 13,000 BTC—without the looming risks associated with convertible bonds. Investors must weigh these factors carefully in an increasingly complex market.