The Blockchain Group, a French technology consulting firm, has launched a convertible bond issuance, primarily subscribed in Bitcoin. The goal? To accumulate Bitcoin, much like MicroStrategy in the United States. The operation was structured through a Luxembourg-based company.
Everyone has heard of MicroStrategy. The American software company took a major strategic turn a few years ago by deciding to buy Bitcoin in large quantities.
On February 5, during its financial results announcement, the company led by Michael Saylor declared holding 471,107 Bitcoins, valued at $37.7 billion with Bitcoin at $80,000.
Renamed Strategy two months ago, the company doubled down on March 10 by launching a preferred stock issuance worth $21 billion. The goal? To buy even more Bitcoin for what it calls “the world’s first and largest Bitcoin Treasury Company.”
Metaplanet and The Blockchain Group
Strategy may have been the first, but it is no longer the only one. In 2024, the Japanese company Metaplanet followed suit, and now, The Blockchain Group has joined in.
Previously, this publicly listed French firm specialized solely in consulting and development in artificial intelligence, data intelligence, and blockchain. But today, the “European MicroStrategy” is also accumulating Bitcoin using its cash surplus, equity raises, and convertible bonds.
“Our goal is to increase the number of Bitcoins per share over time,” explains Alexandre Laizet, Deputy CEO to Forbes.
The company’s “Bitcoin Strategy” began last November with two fundraising rounds and the purchase of 40 Bitcoins. In March, it scaled up by issuing a €48.6 million convertible bond through its 100% subsidiary, The Blockchain Group Luxembourg SA. This bond issuance was primarily subscribed in Bitcoin by a group of professional investors.
With this operation, The Blockchain Group is set to hold over 600 Bitcoins, with a second tranche of €72.9 million planned if the subscription option is exercised.
Debt Denominated in Bitcoin
While The Blockchain Group follows in MicroStrategy’s footsteps, it claims to refine its approach. “Strategy is criticized in the U.S. for its risk of default in the event of a prolonged Bitcoin crash, as its debt is denominated in dollars. But our debt is denominated in Bitcoin. This means the investor, not us, takes on the Bitcoin price risk,” details Laizet.
“This direct Bitcoin subscription of convertible bonds via our Luxembourg subsidiary is a world first,” he continues. “Luxembourg’s regulatory framework allows direct Bitcoin subscriptions, unlike France.”
The cryptocurrencies will be stored in a wallet at Swissquote Bank, which is regulated in Luxembourg.
What if Bitcoin collapses? Laizet doesn’t believe in such a scenario, citing an average annual growth rate of 60% over the past four years. Even in a slowdown, he sees Bitcoin as promising due to increasing institutional adoption.
Moreover, he argues that Bitcoin treasury companies’ stock prices can grow faster than Bitcoin itself: “This happened with Metaplanet, which recorded a 1,800% gain in a year, compared to 60% for Bitcoin. Strategy’s stock surged nearly 3,000% in five years, while Bitcoin rose 1,000% over the same period.”
This article was published in the 5th edition of Forbes Luxembourg magazine.
