Public Companies’ Bitcoin Bet: Can They Weather the Bear Market Storm?

Public companies worldwide have been going all-in on Bitcoin ($BTC) this year. Whether it’s through equity or debt issuance, firms have accelerated their push to acquire $BTC and add it to their balance sheets. While Bitcoin continues to appreciate in value, the firms have also benefited through their stock surge and paper gains. But the looming question is: What will happen if a bear market returns? Will institutional confidence hold steady, or will it waver in the face of volatility ? BeInCrypto spoke to industry experts to examine the possibilities in a potential bear market and whether these firms will contribute to more stability or downfall. Is Institutional Interest in Bitcoin a Double-Edged Sword? Over the past few months, BeInCrypto has extensively reported on corporate Bitcoin acquisitions. The trend pioneered by Michael Saylor, co-founder of (Micro) Strategy, has inspired many others to follow suit. Dean Chen, an analyst at Bitunix, highlighted that the growing influx of institutional capital has solidified Bitcoin’s position as ‘digital gold.’ Furthermore, John Glover, Ledn’s Chief Information Officer (CIO), attributed Bitcoin’s reputation for stability in recent years to the increasing involvement of institutions. Glover said that with Bitcoin’s volatility decreasing over time, it is increasingly behaving like a traditional asset.  Nonetheless, as with all traditional assets, the market experiences cycles, with bull markets typically followed by bear markets. He anticipates that any future bear market for Bitcoin will likely be less severe compared to past cycles. Still, corrections are inevitable. Notably, the executive added that while institutes bring capital, they also bring constraints. Chen pointed out that institutional investors tend to exit faster than retail investors. Thus, if the market moves in the opposite direction, high-frequency trading funds and quant strategies are likely to sell off their positions. However, Marcin Kazmierczak, the COO and Co-Founder of Redstone, offered an alternative viewpoint. He noted that while institutional investors might encounter difficulties during bear markets, their involvement has brought advanced risk management practices to the cryptocurrency space.  The Success of Corporate Financing Models for Bitcoin Acquisition Institutional investors use a mix of financing methods to buy Bitcoin , with debt being the most common one. In a post on X, Redbox Global revealed that Bitcoin-focused companies are facing a significant $12.8 billion debt maturity wall by 2028. These concerns are not new. Previously, Sygnum Bank and other market analysts have also raised alarms about the sustainability of the strategies.  Chen highlighted that Strategy raised $42.87 billion since 2020 through zero-coupon convertible notes and equity issuances to buy over 600,000 $BTC at an average cost of $71,268.00. This strategy boosts Bitcoin accumulation in bull markets. Nevertheless, it strains finances in bear markets with interest payments and falling stock prices.  Moreover, Strategy’s debt makes up about 24.3% of its capital structure. He added that its convertible bonds may trigger mandatory conversion or redemption if Bitcoin drops below a certain threshold. Other companies like Marathon Digital issue equity before bonds, lowering the leverage. Despite this, they have higher capital costs and limited resilience. Still, Glover emphasized that companies with strong capital structures—like staggered maturities and low-interest debt—will fare better. He stated that Strategy’s model can handle significant losses. However, new firms face a higher risk of forced sales in a downturn. Anthony Georgiades, Founder and General Partner at Innovating Capital, also called the strategies a ‘high-stakes play.’ Meanwhile, Kazmierczak noted that companies using convertible debt strategies have demonstrated innovative ways to balance growth with risk management. According to him, their effectiveness ultimately depends on the strength of their core business and their ability to service debt through operational cash flows, rather than relying purely on Bitcoin appreciation.  He believes smart treasury strategies involve appropriately sizing positions relative to overall balance sheets. Kazmierczak detailed that many public companies holding Bitcoin have demonstrated sound management by treating $BTC allocations as a part of their overall reserves. What Will Happen to Bitcoin’s Price if Institutions Start Selling? While the experts showed cautious optimism regarding the financing strategies, centralization is more concerning. As of the latest data from Bitcoin Treasuries, the top three publicly listed Bitcoin treasury companies collectively hold about 695,000 $BTC, accounting for  3.31% of the total  $BTC supply. So, what happens when or more decide to sell?  He elaborated that hedging options are available in the space, and the liquidity of markets like futures and options continues to grow. Therefore, Glover hopes that $BTC treasury companies are strategic in managing their risk to withstand a bear market. Nonetheless, Bitcoin isn’t the only asset that will be impacted. The decline of the largest cryptocurrency could also lead to a broader market downfall.  The CIO of Ledn stressed that ‘Bitcoin is still the anchor for the entire market.’ He noted that if large holders begin offloading, it sends a message that even the ‘safe’ end of crypto isn’t secure. Factors That Could Influence Companies’ Ability to Hold Bitcoin Bitcoin and the crypto sector aren’t immune to macroeconomic pressures. Whether it’s President Trump’s tariffs or the Israel-Iran conflict , the market has reacted quickly by going into a free fall. The experts also outlined factors that are most likely to influence $BTC treasury companies’ ability to hold Bitcoin through a bear market. Furthermore, Bitunix’s Chen also revealed that regulatory factors could play an important role. According to him, the Clarity Act could reduce compliance costs for institutions, thereby supporting long-term Bitcoin holdings by treasury firms. Besides this, shareholder pressure is another key factor to consider. Chen explained that if Bitcoin crashes, coordinated shareholder actions—such as calling a special meeting—could force the board to adopt a more conservative strategy and liquidate assets to reduce risk. Despite this, Glover stresses that a potential bear market wouldn’t erase Bitcoin. However, it will serve as a crucial test for institutional conviction in the asset . [BeInCrypto]