Bit Digital CEO: Guaranteed debts may destroy DAT company during a Bear Market, and leverage risks should be considered cautiously.

On October 1, Bit Digital CEO Sam Tabar stated during the Token2049 conference in Singapore that the Digital Asset Treasury (DAT) company should consider adopting unsecured debt financing instead of secured debt to better cope with potential Bear Markets. "The most efficient way to increase the per-share encryption asset Holdings is through debt financing," Tabar, who is also the CEO of Bit Digital and artificial intelligence company WhiteFiber, pointed out in an interview with The Block on Wednesday. "While increasing encryption asset Holdings without changing equity is good, the choice of financing type is crucial—wrong leverage can destroy a company." Tabar warned that several companies building Ethereum Treasuries have issued secured debt, stating that "such debt is extremely risky." He explained, "When Ethereum assets depreciate, creditors will pursue the company and the pledged assets. While debt instruments are good, they must remain unsecured." This statement follows Bit Digital's announcement on Tuesday to expand the issuance of Convertible Bonds to $135 million. The senior unsecured bonds have an annual interest rate of 4% and pay interest semi-annually.