Nearly 70% of Nakamoto’s Bitcoin holdings have been pledged to Kraken to secure its outstanding loan. The company acquired these coins at an average price of around $118,000 per BTC, while the cryptocurrency is now trading below $69,000, leaving its treasury exposed to significant market losses.

Bitcoin-focused treasury company Nakamoto (NAKA), led by David Bailey, now faces a $165 million debt obligation to Kraken that exceeds its entire stock market value. Despite the growing financial pressure, the company has negotiated revised loan terms that give it more time to address its repayment obligations.

Nakamoto’s business primarily focuses on accumulating and holding Bitcoin. Its outstanding debt consists of 165 million USDT, Tether’s dollar-pegged stablecoin, borrowed from cryptocurrency exchange Kraken and backed entirely by BTC collateral. Meanwhile, NAKA shares finished Thursday at $5.79, translating into a market capitalization of approximately $104 million.

The latest amendment, signed on Wednesday and disclosed in a Thursday Form 8-K filing, pushes the repayment deadline for 60 million USDT from December 4 to December 4, 2027. The remaining 105 million USDT is still scheduled for repayment on June 30, 2027. As a result, the company has eliminated its immediate repayment obligations for the rest of 2026.

The agreement also modifies how Kraken evaluates Nakamoto’s collateral position. Under the revised conditions, the exchange will factor in the net value of the company’s Bitcoin derivatives positions, including put options that could generate profits during a BTC price decline.

Nakamoto Chief Investment Officer Tyler Evans described the changes as an improvement to the company’s financial flexibility, adding that the extended timeline strengthens its ability to manage collateral requirements.

Bitcoin Sell-Off Threatens Nakamoto’s Collateral Coverage

Nakamoto’s latest quarterly filing revealed that it had pledged 3,030 BTC out of its total 4,283 BTC holdings to Kraken by the end of September. At the time, the collateral was valued at approximately $253 million, based on Bitcoin’s price of nearly $83,500.

However, Bitcoin’s latest decline has substantially reduced the value of those pledged assets. With BTC trading below $69,000 on Friday, the collateral is now worth approximately $208 million. CoinDesk estimates that this represents around 126% of Nakamoto’s $165 million outstanding loan.

The declining collateral value creates additional financial risks for the company. Should the holdings fall below Kraken’s minimum maintenance requirements, Nakamoto could be required to repay part of its loan, deposit more Bitcoin, or pursue both options.

The company has approximately 1,253 BTC remaining outside the collateral arrangement. These unpledged holdings are currently worth around $86 million and represent an additional source of potential collateral if required.

The revised agreement’s treatment of derivatives could also help Nakamoto maintain its collateral coverage. Kraken will assess the net value of the pledged derivatives account daily and include any positive amount in its calculations. Negative valuations, however, will be assigned a value of zero.

Nakamoto’s September-quarter disclosure also showed that it had written call options covering 2,150 BTC, with strike prices between $80,000 and $110,000. The company received premiums from these contracts but gave up potential gains if Bitcoin climbed above the specified price levels.

Separately, Nakamoto held put options covering 2,000 BTC at a strike price of $55,000, with expiration set for December 25. At the end of September, the company’s overall derivatives portfolio carried a negative valuation of approximately $6 million. Under the updated agreement, this negative balance would not count toward its collateral requirements.

The original $210 million loan was secured from Kraken last December at an annual interest rate of 8%, when Nakamoto controlled nearly 5,400 BTC. The company subsequently reduced its Bitcoin reserves to cover operating expenses and manage its liabilities. It sold 284 BTC in March and approximately 600 BTC during the second quarter, directing $45 million of the proceeds toward repaying Kraken.