Odaily Planet Daily reported that Bit Digital CEO Sam Tabar said during the Token 2049 Summit in Singapore that digital asset treasury (DAT) companies should consider using unsecured debt financing instead of secured debt to better cope with potential bear markets.

“The most efficient way to increase crypto holdings per share is through debt financing,” Tabar, CEO of Bit Digital and artificial intelligence company WhiteFiber, told The Block in an interview on Wednesday. “While increasing crypto holdings while maintaining equity is a good idea, choosing the right type of financing is crucial—the wrong leverage can destroy a business.”

Tabar warned against the issuance of secured debt by several companies building Ethereum treasuries, stating that "this type of debt is extremely risky." He explained, "When the value of Ethereum assets depreciates, creditors will pursue the company and the collateralized assets. Debt instruments are beneficial, but they must remain unsecured." His comments came on the heels of Bit Digital's announcement on Tuesday that it would expand its convertible bond offering to $135 million. The senior unsecured bonds bear an annual interest rate of 4%, payable semiannually. (The Block)