Bitcoin treasury companies are racking up debt at record speed to raise funds $BTC Charles Edwards, founder of Capriol Investments, reiterated claims from a year ago that the model was based on unsustainable “false yields” and warned against buying.
Important points:
- Charles Edwards said Bitcoin bonds are “rising at record interest rates” due to debt-driven growth.
- He likens the 200 Bitcoin Treasuries on the market today to leveraged mutual funds in 1929.
- Warnings raised as strategy controls about 76% of companies $BTC And buying collapses elsewhere.
Warning from a year ago resurfaces
Capriol Investments founder Charles Edwards warns that bitcoin treasury companies are borrowing money at record interest rates to finance bitcoin purchases. He linked this trend to the October 2025 conference call, arguing that the Digital Asset Treasury (DAT) model is structurally incentivized to rely on borrowing to generate revenue, adding:
“Bitcoin DAT is increasing leverage at record speed. In October 2025, I warned that this is exactly what will happen as this unsustainable business model is encouraged to rely on debt to generate false ‘yields’.”
His main objection is how this strategy generates headline profits. Digital asset vaults (DATs) are public companies that raise capital (often through debt or stock sales) to accumulate Bitcoin on their balance sheets. The model, developed by Strategy Inc. (Nasdaq: MSTR), can amplify profits when Bitcoin rises, but when the price falls, companies that borrowed to make leveraged purchases could face pressure to raise cash, pay down debt or sell.
1929 comparison and the story of “false yields”
Earlier this year, Edwards likened DAT’s rapid expansion to the leveraged mutual funds of 1929, calling it Take advantage of explosions waiting to happenHe pointed out that there are currently around 200 Bitcoin Treasuries in existence, and argued that the more leverage you increase, the more you can trigger a cascade of drawdowns through forced deleveraging, with each seller undercutting the next seller’s price.
Furthermore, given that many are touting the Bitcoin per share growth metric as a form of yield, his “fake yield” charges are a scalpel in the way treasury companies market themselves. Edwards argues that this figure is mainly due to new bond and equity issuances, rather than real income. Simply put, it can be seen as a flywheel that only functions as long as capital markets are open and prices are high.
With so many publicly traded companies and exchange-traded funds (ETFs) currently holding Bitcoin, his view is that a synchronous unwinding could turn a normal correction into something sharper.
Tensions are already showing
The warning comes as financial models face real-world stress, with Bitcoin.com News reporting earlier this month that Bitcoin treasury companies are facing a test of whether to lend or sell.the issue is shifting from accumulation to liquidity (i.e., how companies finance dividends, debt costs, and other commitments without cutting them). $BTC exposure).
The pressure has reached the top of the market. Cryptoquant data showed Corporate foreign bond purchase strategy collapses A total of 1,000 companies purchased by non-strategic companies $BTC In 30 days, it was down 99% from its peak in August 2025. As a result, Strategy now holds approximately 76% of all corporate Bitcoin.
Other companies lean more toward leverage. For example, Japan’s Metaplanet has executed about 20 rounds of debt. $BTC Aiming to reach $100,000, raise funds including zero coupon bonds in about 2 years $BTC target. Bitcoin.com News reported that the company made the following post: Quarterly loss of $725 million Even though the stack reached 40,177 $BTC.
why is it important now
Bitcoin has recently Worst week since FTX collapse in 2022record exchange-traded fund (ETF) outflows hit the market, sending it below $60,000. In a recession, the financial engineering that supported the bond boom during the upswing could reverse itself, putting pressure on the most indebted companies first.
Looking to the future, $BTC Once it recovers, the leverage Edwards fears could once again look like savvy financial engineering. If the economic downturn drags on, the most leveraged government bonds will be the first to feel the effects.
