Strive CIO Says Prolonged Bitcoin Weakness Could Trigger Restructuring, M&A Among Treasury Firms

A prolonged period of Bitcoin weakness could spur more restructurings and mergers among companies that hold the cryptocurrency as a treasury reserve asset.

Ben Workman, chief investment officer at Strive, made the comments at the BTC Prague event on June 12, according to a June 15 report by The Block. If the current market downturn persists, consolidation or restructuring among Bitcoin treasury companies becomes more probable, he said.

"A lot of the problems facing these companies are solved if Bitcoin rises," Workman said. The longer the price stays around current levels, however, the greater the risk that companies will have to sell Bitcoin to fund operations or manage debt burdens.

Workman said a key risk comes from the way many companies used convertible notes to pursue Bitcoin-buying strategies during last year's digital asset treasury, or DAT, boom. Some of those note structures include collateral or coverage requirements, which could turn companies into involuntary sellers if Bitcoin remains weak for a prolonged period.

"That's also why Strive didn't issue convertible notes," he said. "We raised capital only through equity issuance, and that allowed us to keep pursuing the strategy throughout the downturn."

He pointed to Strive's acquisition of Bitcoin treasury company Semler Scientific as an example of the kind of industry consolidation that may emerge. While some market participants have questioned why more mergers and acquisitions have not materialized among Bitcoin treasury firms, Workman said no company wants to sell itself at a discounted price.

Workman added that some treasury companies are already trying to improve their capital structures. Firms including Nakamoto are taking various steps to reduce debt burdens and regain operating flexibility, he said.

Strive has also continued buying Bitcoin. Workman said the company bought 32 BTC last week, matching the amount sold by Strategy. Strive Chief Executive Officer Matt Cole later said the company spent about $4.7 million to purchase another 73 BTC, bringing its total holdings to 19,105 BTC.

Workman also described Strategy's sale of 32 BTC as strategically meaningful. He said the move showed the market that a company can sell Bitcoin to pay dividends if needed, while arguing that credit-rating firms should address the way Bitcoin is treated on corporate balance sheets as though it were a worthless asset.

"You can't build a balance sheet around a single asset and then say you will never use it," he said. "There is a continued need to prove how resilient Bitcoin is as an asset class."

Bitcoin has rebounded in the $60,000 range after falling about 50% from its record high near $126,000. If weakness persists, the gap in financial flexibility among Bitcoin treasury companies could widen, increasing restructuring pressure on more heavily indebted firms.