Opinion: If Bitcoin continues to weaken, the cryptocurrency treasury industry will face a wave of mergers and reorganizations

BlockBeats News, June 15th, Strive's Chief Investment Officer Ben Werkman stated that if Bitcoin remains in a downtrend for a long period, crypto treasury companies relying on convertible bond financing for expansion will face significant pressure, potentially triggering industry consolidation and asset restructuring.

Werkman pointed out that many companies heavily utilized leverage structures such as convertible bonds during the last "Digital Asset Treasury (DAT) craze." Once the market continues to slump, it may trigger debt covenants and cash flow pressure, forcing some companies to sell Bitcoin to maintain operations or meet debt obligations.

He stated, "A rising Bitcoin price can solve many problems, but if the price remains low for an extended period, the risk increases, and companies may be forced to sell assets or undergo M&A consolidation."

Werkman expects to see more M&A transactions and asset restructuring cases within the industry to fix the capital structure. He also mentioned Strive's previous acquisition of Semler Scientific as a blueprint for future industry consolidation.

Regarding the capital structure, he emphasized that Strive adheres to a pure equity model in financing, avoiding the use of convertible bonds to reduce passive liquidation risks in a downturn cycle.

Furthermore, Werkman revealed that Strive recently increased its Bitcoin holding by 32 coins and subsequently added 73 more BTC, bringing the total holdings to approximately 19,105 coins. He also stated that the company is willing to sell Bitcoin when necessary to fulfill financial obligations such as dividends to validate the resilience of the balance sheet and market liquidity.

He added that rating agencies currently tend to provide a more conservative valuation of Bitcoin holdings, which is also one of the key issues the industry needs to address.