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BTC The financial instruments behind institutional companies 'bitcoin reserves may trigger selling pressure on a specific date
Matthew Segal, head of digital asset research at VanEck, shared a list of how companies can use their bitcoin reserves. This list reveals the place of Bitcoin in the company's capital structure. Companies may be forced to sell Bitcoin to meet financial obligations, such as paying off debts or paying dividends.
Corporate Finance and Bitcoin Selling Pressure
Many companies finance their Bitcoin reserves through convertible bonds, preferred shares and loan facilities. These financial instruments have specific maturity dates and dividend payment dates, which could force companies to sell Bitcoin. For example, Bitdeer emptied its Bitcoin vault in February to invest in artificial intelligence data centers. The move resulted in the company withdrawing 943.1 bitcoins from its reserves.
Another example is Strategy, which uses Bitcoin reserves as part of its capital structure. In May, the company sold 32 bitcoins to pay dividends. The sale was linked to a decline in Bitcoin prices and a decline in STRC shares. As of July, STRC shares were trading at less than 15% of their face value.
Future scenarios and market impacts
Corporate debt and senior financing obligations will become more urgent in the coming years. In an optimistic scenario, if bitcoin prices rise and capital markets reopen, companies can refinance their debt, and bitcoin sell-off may remain limited. However, in a pessimistic scenario, weaker bitcoin prices and financing difficulties could force companies to sell more bitcoin. In this case, market supply may increase significantly, putting downward pressure on Bitcoin prices.
JPMorgan said that this new selling policy poses dual risks to the Bitcoin market. Onramp Institutional estimates that 83% of STRC shares are held by individual investors. This situation may lead to potential fluctuations in the Bitcoin market.
