Bitcoin Firm Nakamoto Owes Kraken $165 Million, More Than Its Entire Market Value

David Bailey's Nakamoto (NAKA) now owes crypto exchange Kraken more than what the stock market says the entire company is worth — and the bitcoin holding firm has just bought itself another year to deal with the debt.

Nakamoto's core business is holding bitcoin. The company owes Kraken 165 million USDT, the dollar-pegged stablecoin issued by Tether, on a loan backed solely by its bitcoin. Its shares closed Thursday at $5.79, giving the company a market value of about $104 million.

Under an amendment signed Wednesday and disclosed in an 8-K filing — the document public companies submit to the U.S. Securities and Exchange Commission to report material events — on Thursday, the 60 million USDT installment originally due Dec. 4 will now mature on Dec. 4, 2027. The remaining 105 million USDT is still due June 30, 2027, meaning Nakamoto has nothing left to repay this year.

Kraken also agreed to count the net value of Nakamoto's bitcoin derivatives positions, including put options that pay off if BTC's price falls, toward the loan's collateral requirements.

"This amendment extends our runway and makes our collateral position more resilient," Tyler Evans, Nakamoto's chief investment officer, said in a statement.

How Thin the Cushion Is

Nakamoto's quarterly report, filed this week, shows that 3,030 of its 4,283 bitcoin were pledged to Kraken at the end of September. With bitcoin trading near $83,500 at the time, those coins were worth about $253 million.

At Friday's price of under $69,000, those holdings are worth roughly $208 million — about 126% of what Nakamoto owes, according to CoinDesk calculations.

If that value falls below a set maintenance level, Nakamoto must repay part of the loan, pledge additional bitcoin, or do both. The company has about 1,253 unpledged bitcoin left to post, worth roughly $86 million at current prices.

That is where the options come in. Under the amended terms, Kraken calculates the net value of Nakamoto's pledged derivatives account every day and counts it toward those collateral tests, with any net negative value treated as zero.

At the end of September, Nakamoto had sold call options on 2,150 bitcoin at strikes between $80,000 and $110,000, collecting premiums in exchange for giving up gains above those prices. It had also bought put options on 2,000 bitcoin at a $55,000 strike expiring Dec. 25. The entire book was worth minus $6 million at quarter-end, meaning it would have counted for nothing under the new terms.

The loan originated last December at $210 million with an 8% annual interest rate, when Nakamoto held nearly 5,400 bitcoin. The company sold 284 BTC in March to fund operations, then sold about 600 more in the second quarter, sending $45 million of the proceeds back to Kraken — the difference between the loan's original size and the 165 million USDT balance owed today.