When convertible bonds mature or trigger a put option, treasury companies don't always have to sell their crypto. But in three situations, selling becomes the only real option—especially when the company is short on cash and can't sell more stock. These three scenarios have played out recently at Strategy and Sequans.
Scenario 1: Cash Runs Low, and Selling Crypto Becomes the Backup Funding Source
This is the most common case. The company doesn't have enough cash on hand to pay off debt, and its stock price is too low to raise money. That leaves one valuable asset to tap—bitcoin.
How it happens: In May 2026, Strategy announced it would repurchase $1.5 billion of its 2029 convertible bonds for $1.38 billion—roughly a 20% discount. In its SEC filing, Strategy clearly listed the funding sources as: cash reserves, proceeds from stock issuance, and proceeds from the sale of bitcoin. This marked the first time Strategy formally listed "selling bitcoin" as an optional funding source in an official document.
Real-world example: French chipmaker Sequans Communications went even further. In July 2025, the company raised $384 million through equity and convertible bonds to buy bitcoin, at an average cost of around $116,000. When bitcoin later dropped over 30% from its peak above $126,000, Sequans sold 344 bitcoin in the second quarter to repay convertible bonds and boost cash reserves. By May, it had fully redeemed all convertible bonds. The CEO stated plainly that exiting the bitcoin strategy was about "strengthening the balance sheet and simplifying the capital structure."
Scenario 2: Bondholders Demand a Put, and the Company Has No Cash but Crypto
Convertible bonds often include a "put right": if the company's stock price falls low enough (say, below 70% of the conversion price for 30 consecutive trading days), bondholders can sell the bonds back to the company at face value plus interest. This right belongs to the bondholder—the company has no say. If bondholders want their money back, the company must pay.
How it happens: Strategy now faces roughly $1 billion in bonds that can be put back to the company as early as September 2027. If the stock price is still depressed by then and bondholders choose to put rather than convert, Strategy will need a large sum of cash. On a Q1 earnings call, Saylor already hinted at the possibility, saying: "We might sell some bitcoin to pay dividends, just to give the market confidence." That was essentially a heads-up to investors.
Risk note: Prediction market traders now price the probability of Strategy actually selling bitcoin before the end of 2026 at around 90%. This has risen noticeably since before the first earnings call, signaling that the market now largely expects a sale to happen.
Scenario 3: Deliberate Deleveraging—Selling Crypto to Clear Debt and Exit the Bitcoin Treasury Strategy
This isn't about being forced to repay debt. It's about the company deciding the "bitcoin treasury" path isn't working and choosing to sell crypto, redeem all debt, and cut leverage entirely.
How it happens: Sequans followed a textbook path—it had spent $384 million (via equity and convertible bonds) to buy BTC, but bitcoin dropped 30% and its chip business was losing money. Under dual pressure, the company opted to deleverage. Q2 revenue was just $7.5 million, with a net loss of $9.8 million and a $3 million bitcoin impairment charge. From a peak holding of over 3,200 BTC, the company shed more than 80%, keeping only about 314 BTC. It plans to gradually liquidate the rest and fully exit the bitcoin treasury strategy.
Strategy isn't at that point yet, but it has already begun actively reducing its debt load—repurchasing 2029 bonds at a 20% discount and shaving $150 million off its stated debt. The company has accumulated roughly $8.2 billion in debt in recent years, with multiple maturities and put dates coming up. Whether this funding model is sustainable is now a key concern for the market.
How to Check Whether a Treasury Company Might Be Forced to Sell Crypto
To gauge whether a treasury company could be pushed into selling crypto, look at three things:
- Cash reserves on the balance sheet—are they enough to cover debt maturing in the next 12 months?
- The conversion premium based on the current stock price—if the stock is far below the conversion price, bondholders likely won't convert, meaning the company will have to repay in cash.
- The company's latest SEC filings—check whether "sale of bitcoin" appears under the "sources of funds" section.
Next step: If you hold stock in Strategy or a similar treasury company, keep a close watch on the "debt maturity schedule" and "put option trigger conditions" disclosed in annual reports. After each earnings release, compare the total debt due within 12 months against the company's cash reserves. If cash covers less than half of what's coming due, the odds of a bitcoin sale rise sharply.
