New Hampshire's Bitcoin-Backed Bond Heads to Final Vote as Liquidation Risk Looms

New Hampshire's Executive Council will hold a public hearing Wednesday on a proposed $100 million bond deal intended to finance private Bitcoin (BTC) purchases. Approval would remove the final state-level obstacle for what would be the first municipal-style bond structure collateralized by Bitcoin. Market risk may prove more decisive than politics. After Bitcoin's recent drawdown cut prices by more than half from prior highs, the structure could be forced into liquidation after roughly a 12.5% decline, a feature that could determine how the transaction ultimately plays out. BFA to Issue Taxable Conduit Revenue Bonds The New Hampshire Business Finance Authority (BFA) requested the hearing under RSA 162I. Executive Director James KeyWallace asked Governor Kelly Ayotte and the five-member council to assess whether the project is feasible and in the public interest. If cleared, the BFA would issue taxable conduit revenue bonds. Under the conduit model, the state facilitates financing without borrowing itself, lending proceeds to NH CleanSpark Borrower Trust 20261, an entity tied to CleanSpark, the Nevada-based Bitcoin miner that is still absorbing steep first-quarter losses. Jefferies is slated to underwrite the offering, with Wave Digital Assets credited as the deal's designer. Repayment would be the borrower's responsibility, leaving taxpayers with no direct exposure. The BFA would be paid its fee in Bitcoin, a step intended to seed a planned Bitcoin Economic Development Fund. The proposal follows House Bill 302, signed in May 2025, which made New Hampshire the first state to permit its treasurer to hold digital assets. By contrast, the federal Strategic Bitcoin Reserve remains mired in legal uncertainty. Why the 140% Trigger Has Analysts Concerned Moody's assigned the bonds a provisional Ba2 rating on March 31, placing them two notches below investment grade in the speculative-grade category. The three-year notes would rely on BitGo Trust Company to custody the Bitcoin collateral in cold storage and to carry out any required liquidation. CleanSpark would post $160 million in Bitcoin against $100 million in obligations, creating a 160% collateral coverage ratio. If that coverage falls to 140%, the structure requires mandatory liquidation and early redemption. All else equal, a 12.5% drop in Bitcoin's price would eliminate the cushion. Recent market moves suggest that threshold is not hypothetical. Bitcoin topped $126,000 in October 2025 and fell to just above $60,000 by February. At the same time, record miner BTC sales underscored how quickly the sector can turn coins into cash under stress. David Krause, emeritus finance professor at Marquette University, modeled the structure and found historical Bitcoin volatility made a trigger event highly likely, the Boston Globe reported. Krause said the bond may function as a proof of concept for bringing digital assets into structured finance but is poorly suited as a general-purpose public finance tool. Wednesday's vote is widely seen as a formality after the BFA board approved the framework on November 18. The more consequential test is likely to come in the market, where investors must weigh speculative-grade credit risk against Bitcoin's near-term price outlook. New York City previously declined a similar proposal over tax law concerns, according to law professor Tonya Evans.