Inside the Two-Horse Race for Europe's Next Bitcoin-Backed Preferred

Smarter Web paid off Smarter Convert in July and repriced its Coinbase facility this morning. Capital B has converted the last of its B-01 bonds and come out with fewer diluted shares than it started with. Both bought Bitcoin today. Neither purchase is the reason to read the releases.

The Smarter Web Company bought 11.89 Bitcoin this morning for £559,493, taking holdings to 2,712 BTC. Capital B bought one Bitcoin for €56,061, taking group holdings to 3,140 BTC. Both releases carry the accumulation update at the top. In both cases the material change sits elsewhere in the document.

On 23 July, Smarter Web repaid the Smarter Convert instrument in full. The company returned $11,698,540 to TOBAM approximately two weeks ahead of maturity, at its own request and with TOBAM's support. The repayment was funded by the disposal of 177.8909127 Bitcoin at an average price of $65,762 - the entire holding acquired with the subscription proceeds. The original agreement required at least 98% of the funds to be deployed into Bitcoin. Smarter Web had elected to deploy 100%, and was therefore obliged to return all of it.

The number that matters is 7,718,551. That is the potential ordinary share issuance the repayment eliminated. A Bitcoin-denominated convertible held by an institutional counterparty is a claim that converts into common equity at a price the company does not control. Paying it off in cash converts that contingency into a closed position.

Andrew Webley's framing at the time was the substantive part. The instrument had provided an alternative to traditional leverage during the early stages of the treasury strategy, and the company no longer regards fiat or Bitcoin-denominated convertibles as the right capital solution for its current stage. A company that has publicly ruled out convertibles, and which holds £210,000,000 of distributable reserves created expressly to support dividend-bearing equity issuance, has narrowed its funding options considerably.

This morning addressed the other side of the stack. The Coinbase Strategic Credit Facility now carries a variable rate of 6%, down from a range of 6.75% to 7.25%. Drawings are unchanged at £18,500,000. On the drawn balance, the repricing removes between £138,750 and £231,250 of annual interest, and the facility remains repayable at the company's discretion without additional charges.

That reduces the forward claim Coinbase holds on the balance sheet. It does not shrink the principal. It shrinks what the principal costs to carry each year, ahead of everything junior to it, and it leaves the company free to retire the facility without penalty. Any preference instrument would rank behind that facility. The less the senior layer draws annually, and the more easily it can be cleared, the more room exists beneath it.

Capital B Has Cleared Its Entire B-01 Tranche and Shrunk Its Diluted Share Count

Blockstream Capital Partners has converted its remaining 14,195,352 OCA B-01 into 28,687,362 new ordinary shares at a rounded conversion price of €0.495. No OCA B-01 remain outstanding. The tranche, issued in April 2025 and subscribed in Bitcoin, is gone in full.

The share count then did something counterintuitive. Fully diluted shares within Capital B's Bitcoin KPIs fell from 427.5 million to 426.4 million, because the company had conservatively reserved a larger number of conversion shares than the conversion ultimately required. Together with the single Bitcoin acquired today, satoshis per fully diluted share rose from 734.3 to 736.4. A conversion that issued 28.7 million new shares improved the per-share Bitcoin backing rather than diluting it.

Chief executive Alexandre Laizet, posting on X, tied that directly to the company's credit ambitions, describing the outcome as more Digital Credit potential capacity alongside more sats per share. On management's account, the clearance is not housekeeping. It is capacity creation.

Why they continue to buy Bitcoin

The collateral pool sets the size of everything built above it. A preferred instrument needs to be over-collateralised to sell, and Strategy has established the reference point the sector now works from with STRC. Saylor put the ratio at five to one, on the basis that at that coverage the underlying asset can fall 80% and credit holders remain whole, with the common equity absorbing the loss.

Applied to this morning's figures, Smarter Web's 2,712 BTC at its own execution price of £47,052 is a collateral pool of roughly £127.6m, which supports about £25.5m of preferred at five to one, before the £18.5m Coinbase facility that ranks ahead of it. Capital B's 3,140 BTC at the €54,451 mark implied by its stated net asset value supports roughly €34.2m. Both sit below what each company has already committed to Bitcoin, at £224.8m of net purchases and a €283.9m cost basis respectively. That relationship is why purchases at this scale still count. Every additional Bitcoin adds close issuance headroom at five to one, and the collateral pool is the numerator that determines how much digital credit either company can eventually sell.

Two Routes Out of Convertible Debt, One Destination

Smarter Web paid its convertible off in cash and sold the Bitcoin standing behind it, cancelling 7.7 million potential shares in the process. Capital B let its convertible convert and emerged with a smaller diluted share count than it carried beforehand. One company chose redemption, the other conversion. Both have taken the instrument that sat between common equity and anything senior out of the picture.

What each has built instead is room. Smarter Web has distributable reserves, no convertible, and a cheaper senior facility it can retire at will. Capital B has an empty B-01 tranche and a rising per-share Bitcoin figure. Neither has announced an instrument. Both have removed the reasons an underwriter would point to first.