Bitcoin Miners and Treasury Firms Face Market Challenges Amid Convertible Note Deals

According to Cointelegraph, shares in Bitcoin miner IREN and treasury company Kindly MD experienced declines following announcements of significant convertible note deals. This comes amid a broader slowdown in venture capital activity within the cryptocurrency sector. IREN's shares initially rose by 6.81% during Tuesday's trading session but fell by 4.9% in after-hours trading, settling at $58.66. The decline followed the company's announcement of an $875 million convertible senior note offering. Meanwhile, Kindly MD, which recently merged with David Bailey's Bitcoin firm Nakamoto, revealed a $250 million five-year convertible note agreement with fintech company Antalpha. This announcement also led to a drop in Kindly MD's shares, which fell by 0.97% during the day and an additional 2.83% in after-hours trading, closing at $0.99. The cryptocurrency sector continues to attract institutional interest, yet Galaxy Research's latest venture capital report highlights a 59% decline in funding and a 15% reduction in deal count compared to the previous quarter. IREN plans to utilize part of the proceeds from its note offering for general corporate purposes and working capital. Additionally, the company aims to fund capped call transactions to mitigate the risk of excessive share creation when debt is converted into stock. An extra $125 million in notes is available for initial purchasers, convertible into company shares. These transactions are expected to minimize potential dilution of IREN's ordinary shares upon note conversion, addressing shareholder concerns about the impact of convertible note deals on stock value. Kindly MD and Antalpha have entered a non-binding letter of intent for long-term financing, aiming to reduce dilution risk for stockholders compared to standard convertible debt. The funds are earmarked for expanding Bitcoin holdings in Kindly MD's Bitcoin Treasury and general corporate purposes. The financing will also replace an existing $203 million Bitcoin-secured loan from Two Prime Lending Limited. Antalpha is set to provide an interim Bitcoin-backed loan to Kindly MD, pending the completion of the convertible debt facility. David Bailey emphasized the partnership's significance, stating it demonstrates the strength of Bitcoin companies supporting each other. He noted that the initiative addresses current financing needs while laying the groundwork for future structures tailored to Bitcoin treasury companies. This marks the beginning of a series of initiatives intended to benefit the portfolio, shareholders, and the broader Bitcoin ecosystem.