The company use of cryptocurrencies is evolving past funds, with a variety of companies adopting bitcoin and different digital belongings as core treasury reserves. A report Thursday from ranking firm Morningstar DBRS cautions that this technique may heighten credit score threat profiles.
In keeping with BitcoinTreasuries.web, roughly 3.68 million BTC (value about $428 billion as of Aug. 19) are held throughout firms, exchange-traded funds (ETFs), governments, decentralized finance (DeFi) protocols and custodians. That is about 18% of bitcoin’s circulating provide.
Funds dominate with 40% of holdings, adopted by public firms at 27%. That publicity stays extremely concentrated. One agency, Technique (MSTR), controls over 629,000 BTC, accounting for 64% of all public-company treasury holdings, the report famous.
Morningstar DBRS highlighted a variety of vulnerabilities in company crypto treasury methods, together with regulatory uncertainty, liquidity challenges during times of volatility and publicity to alternate counterparties.
Heavy reliance on bitcoin reserves may pressure liquidity administration, whereas the asset’s sharp value swings add additional threat.
The agency additionally famous that completely different tokens carry distinct technological and governance points, and custody, whether or not dealt with in-house or by way of third events, stays a crucial safety concern.
Company adoption of crypto treasury methods is predicted to develop, led by firms like Technique and MARA Holdings (MARA). Morningstar DBRS warned that focus, volatility, and regulatory complexity imply such methods may materially reshape how credit score markets assess company threat.
Learn extra: Bitcoin Treasury Agency Semler Scientific Nonetheless Has 3X Upside: Benchmark
