Smarter Web Issues UK’s First Bitcoin Bond, Plans 30% BTC Allocation

The Smarter Web Company has introduced a $21 million bitcoin-denominated convertible bond called Smarter Convert, designed to fund strategic bitcoin purchases while capping exposure. Under the terms, the company will allocate no more than 30% of the raised funds to acquiring BTC.

Fully subscribed by French asset manager TOBAM, the bond is the first of its kind in the UK. It pays no interest and can be converted into shares at a 5% premium to the reference share price.

How the Bitcoin-Linked Bond Works

Smarter Convert is structured to repay its value based on bitcoin’s market price at maturity, unless converted into shares. While the principal is tied to BTC, the share conversion price is fixed in GBP at £1.95.

TOBAM invested through three of its managed funds and highlighted the structure’s blend of risk control and innovation. To strengthen its capital structure, the company included a forced conversion clause. This allows equity conversion if the share price rises 50% above the conversion price for 10 trading days after six months.

If this condition isn’t met, bondholders retain downside protection by opting for a 98% repayment after 12 months. This limits investor loss while allowing the company to keep 2% of the funds if the bonds are repaid instead of converted.

To mitigate overexposure to crypto, Smarter Web has capped its bitcoin acquisition under the scheme to 30% of its unencumbered treasury. The firm says this approach ensures a balanced and responsible adoption of BTC.

Smarter Web’s Expansion Plans

If all bonds are converted into shares, the company will issue approximately 7.7 million new shares. This results in less dilution than traditional equity raising, thanks to the 5% conversion premium.

Notably, Smarter Web may also issue additional bonds under similar terms, extending this mechanism to other investors. The company views this as a capital-raising strategy that preserves flexibility and maintains operational control.

Commenting on the initiative, CEO Andrew Webley said the structure helps strengthen the firm’s bitcoin-backed balance sheet. TOBAM’s CEO, Yves Choueifaty, described the bond as a benchmark for innovation that aligns with long-term financial principles.

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