The large-scale institutional adoption of Bitcoin (BTC) in recent months is a fundamental part of the digital currency growth, and has been rated at 31.5% so far this year. To date, over 200 entities have accumulated BTC as financial assets.
Charles Edwards, CEO of investment firm Capriole Investments, said these BTC accounting companies (the business model is the same as the accumulation of BTC) are themselves, and are assumptions in their own right. “Best Risk” and current cycle prices for the Bitcoin market.
In the opinion of analysts, risk falls into the debt of these business entities to acquire Bitcoin. Cryptonotics reports that these entities follow an example strategy, where they are companies borrowing up to USD 2,000 million to purchase BTC.
Other entities such as Metaprenet, Mara Holdings, Gamestop, Trump Media & Technology Group (TMTG) are issuing corporate debts to join the trend and buy Bitcoin, mentioning some people as well.
To date, 1.2 million bitcoins have been in the hands of companies, equivalent to 5.7% of the largest currency supply, which is 21 million units, and 1.2 million bitcoins have been in business hands. Discriminatory, stock market contributions at 976,132 BTC and private companies at 294,101 BTC, according to data from Bitcointreasuries.
The above shows that in recent months the corporate fever from Bitcoin has been unleashed, with companies in Latin America, the US, Asia and Europe adopting BTC as a reserve and resorting to debt for acquisitions.
In that order of ideas, for Charles Edwards, if enough finance companies were too close to buy more BTC, the receding price could generate a massive “bearish waterfall.” It would be “just enough” to cause a “deep circular bear market.”
It is a “systematic risk” around companies that have Bitcoin treasures, as there can be a dominant effect scenario if a company with thousands of coins begins to start holding BTC. This situation not only affects the cryptocurrency market, but also affects the company’s own evaluation.
It must also be taken into consideration that many of these companies that have the treasures of Bitcoin were essentially financial zombies. In other words, companies that are in important situations They joined the trend of BTC reserves Grab the flight. According to an analyst at Exchange Bitmex, these entities have lost their status and are at risk of being “dead.”
There is time for the alert
It’s not the first time Edwards goes out to warn Bitcoin finance company risk. Two weeks ago, analysts said that many of these companies entered the market at a purchase price of USD 100,000 per BTC, and there was little room for operation if prices stagnate or fall.
He also warned that if the number of participants increased, the competition would do so too, Reduce the company’s capabilities by attracting new capital And they led them to expand their debts to buy BTC, increasing their risk.
A similar alert was issued by analyst Henrik Seeberg. He warns that BTC’s presence in traditional portfolios could even deepen the financial crisis he is on his way.
And the same thing expressed influencer Manuel Terron Godoy. He warned that companies that opened Treasury ministry from both Bitcoin and other cryptocurrencies are a real “financial bubble” that could explode when the bear market arrives.
So the warning is clear. Bitcoin’s Corporate Treasury can portray it as beneficial to BTC, but it also carries risks to evaluate. But they could also be an opportunity to take advantage of it, and why not? Make it much more visible depending on the ecosystem.
