BlockBeats News, October 1st, Bit Digital CEO Sam Tabar stated during the Token2049 summit in Singapore that Digital Asset Treasury (DAT) companies should consider adopting unsecured debt financing as an alternative to secured debt to better address a potential bear market.
「The most efficient way to increase the per-share holding of encrypted assets is through debt financing,」 Tabar, who also serves as CEO of Bit Digital and the artificial intelligence company WhiteFiber, pointed out in an interview with The Block on Wednesday, 「While increasing encrypted asset holdings with unchanged equity is good, the choice of financing type is crucial—wrong leverage can be enough to destroy a company.」
Tabar warned that many companies building Ethereum treasuries have issued secured debt, bluntly stating that 「such debt carries extremely high risk.」 He explained, 「When the value of Ethereum assets depreciates, creditors will pursue the company and collateral. While debt instruments are good, they must maintain an unsecured nature.」 This statement came shortly after Bit Digital announced on Tuesday the expansion of its convertible bond issuance to $135 million. The senior unsecured bonds carry an annual interest rate of 4%, with interest paid every six months.
