What happens when a middling French chip maker decides to load up on more Bitcoin than it’s ever booked in annual revenue?
Wait, another corporate Bitcoin binge?
Everyone on Crypto Twitter is clinking virtual glasses right now because Sequans Communications—yeah, the LTE-for-IoT company you probably haven’t thought about since 2017—says it wants to raise $384 million and dump the whole pile into BTC. My feed is full of laser-eyes screaming “Number go up!” But I’m squinting at the fine print, wondering if we’re watching a sequel to the MicroStrategy saga… only with a much smaller balance sheet and way less room for error.
Here’s what actually happened
According to the filing that leaked late last night (shout-out to the sleuths on EDGAR), Sequans plans to issue convertible notes to the tune of $384 million, then convert the proceeds straight into Bitcoin “for long-term treasury management.” If they manage to pull it off, they’ll instantly join the club of roughly 240 public and private companies now stashing BTC on their balance sheets—a figure that has nearly doubled from 124 only a few weeks ago. Combined, those firms already sit on about 4% of the total circulating supply.
In pure BTC terms, Sequans would be angling for roughly 6,000–7,000 coins (depending on execution price; I’m ball-parking $55k as I write this). That stash alone would dwarf the company’s entire 2023 revenue line of $47 million. Talk about putting the cart in front of the silicon horse.
Why I’m not cheering just yet
I get the knee-jerk bullish reaction—less liquid supply, future halvings, yada-yada. But let’s pump the brakes and zoom out:
- Debt is still debt. MicroStrategy’s blend of converts and junk bonds looks genius only because Bitcoin kept ripping higher. If BTC had flat-lined, Saylor would be selling his yacht to service coupons. Sequans doesn’t have the cash cow software business to backstop anything.
- Their core business is already bleeding. Go skim their last earnings call: margins compressed, R&D spending cut, guidance lowered. Issuing debt to buy a volatile asset feels less like strategic asset allocation and more like swinging for the fences.
- Liquidity risk is no joke. If Bitcoin tanks 40%—remember 2022? I do—bondholders will demand covenants be tightened or capital raised. That could force a fire sale, pushing the price down further. Reflexivity works both ways, folks.
The supply myth everyone ignores
Yes, 4% of all BTC sounds massive. But here’s the nuance most Twitter threads skip:
Illiquid supply only matters if the holders never sell—and corporations absolutely can and will sell.
Boardrooms don’t have diamond hands; they have quarterly reports and risk committees. Tesla’s little BTC detour? They trimmed 75% in Q2 2022 to “improve liquidity.” Ask yourself: if Elon Musk, king of YOLO, couldn’t stomach the drawdown, will an IoT chip maker?
But isn’t institutional adoption bullish?
Sure, in the abstract. More logos equal more legitimacy, and that eventually funnels into ETF flows. But every new entrant levered to the gills sets up a potential forced-seller cascade later. Think Archegos meets Mt. Gox restitution. I’m not entirely sure that’s the tailwind people think it is.
Plus, retail has a short memory. Remember when Block.one raised $4 billion for EOS in 2018, promised to hodl BTC forever, and quietly dumped half? Corporate treasuries can become stealth supply faucets the moment CFOs smell budget pressure.
Where does this leave the chart?
Technically, BTC is still pinned between $52,500 support and the $58k resistance zone we’ve failed to clear three times since January. An announcement like Sequans’ might give us a knee-jerk green candle, but unless they actually convert dollars to sats on an exchange—and soon—the order book impact is theoretical. Remember how long it took Tesla to deploy its $1.5 billion buy? Nearly six weeks.
If you’re watching order-flow tools like WhaleMap or Material Indicators, look for unusual spot bids clustering around $55k. Until that shows up, this is narrative, not net demand.
What I’m doing with my own stack
I’m neither dumping my bags nor buying the pumps. Instead, I’m positioning with a delta-neutral yield strategy on Deribit: selling April $60k covered calls against spot I already hold and using that premium to fund downside insurance at $48k. If Sequans triggers a melt-up, I’ll make less upside but sleep fine. If it turns into another levered balance sheet implosion, I’m hedged.
Random but relevant tangent
Isn’t it curious that a semiconductor outfit is opting for BTC rather than, say, funding new fabrication capacity? With Nvidia’s H100s back-ordered till 2025 and AI sucking every spare wafer off TSMC’s lines, one would think chip firms should be pouring cash into *chips*. Maybe they couldn’t compete, or maybe management just wants a headline. Either way, the opportunity cost feels massive.
Bottom line—think for yourself
Everyone’s celebrating, but I think they’re missing the bigger picture. Sequans might spark another mini-supply squeeze, or it could blow up spectacularly and hand bears a fresh pile of ammo. Your portfolio shouldn’t hinge on a single corporate FOMO trade.
Don’t just scroll Twitter and inhale hopium. Open the filings, run a scenario analysis, and ask the annoying questions. If you’re convinced BTC goes to $250k regardless, great—size accordingly and ignore my skepticism. But if you’re like me and prefer risk-adjusted returns over max hype, maybe dial down the fireworks until the BTC actually lands in Sequans’ cold storage.
Stay curious, stay liquid, and—most importantly—stay skeptical.
