Bitcoin Treasury Companies Face Crisis as Satsuma Technology Sells Half Its Holdings

Growing Crisis Among Bitcoin Treasury Firms

The once-hyped Bitcoin treasury company model is showing signs of strain as another firm has been forced to sell a significant portion of its cryptocurrency holdings to meet debt obligations. Satsuma Technology, a London-based artificial intelligence company, sold 579 of its 1,199 Bitcoin holdings, realizing approximately £40 million in proceeds ^[1].

The sale comes as market conditions have drastically deteriorated for companies that use capital markets to fund Bitcoin purchases. Many of these publicly traded companies now have market capitalizations below the value of their Bitcoin holdings, making new purchases through stock issuance impossible without diluting shareholders ^[1].

Convertible Bond Pressures Force Sales

Satsuma Technology, which trades on the London Stock Exchange under the ticker SATS, announced its Bitcoin treasury strategy on June 17 ^[1]. The company had financed its Bitcoin purchases partly through convertible bonds, with £78 million worth becoming due on December 31 ^[1].

The Bitcoin sale increased the company's cash position to approximately £90 million, ensuring it can repay the convertible bond holders ^[1]. After the transaction, Satsuma Technology retains 620 BTC worth more than £40 million ($57 million), ranking it 60th on the list of publicly traded companies holding Bitcoin ^[1].

CEO Henry K. Elder defended the decision, stating: "The strength of our team and our balance sheet will support our vision of becoming a leading Bitcoin company in the region and creating long-term value for our shareholders" ^[1].

Pattern of Failed Treasury Strategies

Satsuma Technology is not alone in its struggles. Approximately six weeks earlier, French semiconductor company Sequans was forced to sell 970 Bitcoin to pay debts ^[1]. Both companies' stock prices collapsed after implementing their Bitcoin strategies, with Satsuma's shares trading more than 90% below their summer peak ^[1].

The failures are particularly notable given the expertise involved. Sequans partnered with Bitcoin service provider Swan and its CEO Cory Klippsten, while Satsuma Technology's CEO Henry K. Elder previously led UTXO Management, a sister company of Bitcoin Magazine that has assisted other firms, including Metaplanet, in becoming Bitcoin treasury companies ^[1].

Even David Bailey, CEO of Bitcoin Magazine and The Bitcoin Conference and a former advisor to U.S. President Donald Trump, launched his own Bitcoin treasury company called Nakamoto, whose stock price currently sits more than 98% below its all-time high ^[1].

SpaceX Moves Bitcoin Holdings

Meanwhile, Elon Musk's SpaceX transferred 1,021 BTC worth approximately $94.48 million, according to blockchain data from Arkham Intelligence cited by on-chain analytics firm Lookonchain ^[2]. The transfer occurred as Bloomberg reported on December 10 that SpaceX is planning a $30 billion IPO at a $1.5 trillion valuation ^[2].

Lookonchain speculated the Bitcoin was transferred to a wallet address linked to Coinbase Prime for custody, suggesting no immediate sale is planned ^[2]. SpaceX has conducted several similar transfers since July 24 as routine custodial movements, none followed by sales ^[2].

However, SpaceX previously sold approximately 70% of its Bitcoin holdings in mid-2022, possibly due to market-wide crashes triggered by the Terra-Luna collapse and FTX implosion ^[2]. The company currently holds over 8,200 BTC valued at more than $722 million ^[2].

Strategy's Dominant Position

The largest Bitcoin treasury company, Strategy (formerly MicroStrategy), holds 660,624 BTC ^[1]. While the company's convertible bonds don't begin maturing until 2028, it recently built a cash reserve through stock issuances to guarantee dividend payments on preferred shares for 21 months, suggesting it won't need to sell Bitcoin in the near term ^[1].