Bitcoin Treasury Sequans Sells $100 Million in BTC to Pay Down Debt
NYSE-listed chipmaker Sequans (SQNS) sold 970 Bitcoin to reduce its debt by 50% to $94.5 million, cutting its Bitcoin holdings from 3,234 to 2,264 BTC, worth approximately $228 million. Despite the sale, CEO Georges Karam reaffirmed the company's commitment to Bitcoin as a strategic reserve asset, citing the move as a tactical decision to strengthen financial flexibility. Sequans follows digital asset treasury strategies similar to firms like MicroStrategy, which holds the largest corporate Bitcoin reserves. However, experts caution about the risks of such strategies, as share prices of some participating companies have declined. Regulators like the SEC continue scrutinizing such practices, showcasing the volatility and challenges of using digital assets for financial growth.
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Sequans Sells Bitcoin to Pay Off Debt
New York Stock Exchange-listed chipmaker Sequans (SQNS) has sold 970 Bitcoin to pay off debt just four months after pivoting to a digital asset treasury strategy, the company announced on Tuesday. The Paris-based firm, which started buying the leading cryptocurrency in July, said that it had pared its holdings to 2,264 BTC from 3,234 BTC. Those remaining assets are now valued at approximately $228 million.
Debt Reduction and Stock Performance
The semiconductor manufacturer has slashed its outstanding debt by 50%—to $94.5 million from $189 million. However, this decision brought no immediate relief to its stock performance. Shares of Sequans (SQNS) closed down 16.6% lower on Tuesday afternoon Eastern Time.
Sequans' Bitcoin Strategy Remains Unchanged
Despite selling a significant portion of its Bitcoin holdings, Sequans CEO Georges Karam affirmed: "Our Bitcoin treasury strategy and our deep conviction in Bitcoin remain unchanged." He described the sale as a 'tactical decision' intended to unlock shareholder value under current market conditions. Karam added, "It strengthens our financial foundation and removes certain debt covenant constraints, enabling us to pursue a wider set of strategic initiatives to prudently develop and grow our treasury, with Bitcoin as a long-term strategic reserve asset."
Digital Asset Treasury Strategies Among Companies
Sequans joins a growing list of over 200 publicly traded companies adopting a similar approach to that championed by Nasdaq-listed MicroStrategy (now called Strategy). MicroStrategy pivoted from software development to Bitcoin acquisition in August 2020 in an effort to generate higher shareholder returns. To date, it has accumulated 641,205 BTC—worth about $64 billion at Bitcoin's price of $100,000 per unit.
Risks Associated with Crypto Treasury Holdings
While many companies adopt 'digital asset treasuries' to boost stock prices, some experts caution about the inherent risks. Several firm stocks that embraced this strategy have experienced significant drops. Analysts also pointed out that despite Strategy's $2.8 billion in quarterly profits, its declining multiple to Net Asset Value (mNAV) raises concerns over the premium investors are willing to pay relative to its crypto holdings.
Regulation and Recent Crypto Market Incidents
In September, the U.S. Securities and Exchange Commission (SEC) suspended trading of digital advertising firm QMMM Holdings over alleged stock manipulation. This occurred after its stock skyrocketed over 2,100% following an announcement of buying assets like Bitcoin, Ethereum, and Solana. Such regulatory scrutiny highlights the risks associated with speculative crypto investments.
Market Predictions for Strategy’s Bitcoin Holdings
According to Myriad, a prediction market operated by Dastan (Decrypt's parent company), 95% of respondents believe that Strategy will not sell its Bitcoin holdings before the year ends. This sentiment reflects the deep trust in Strategy's long-term conviction in Bitcoin as a core reserve asset.