Coinbase outlines the possible negative consequences of bitcoin accumulation by publicly traded firms

What’s new? Analysts of the institutional division of the US crypto exchange Coinbase have said in a new report about the prospects for growth of the crypto market until the end of this year. However, at the same time noted the presence of systemic risks on the part of companies that buy bitcoin with leverage for subsequent storage on the balance sheet.

Material by The Block

What else is known? Analysts expect more growth in the crypto market over the next three to six months and for bitcoin to reach a new all-time high in the second half of the year as the impact of US tariff policy on macroeconomic conditions weakens.

At the same time, they note the growing popularity of the bitcoin strategy, in which public companies invest in the first cryptocurrency to provide shareholders with indirect access to the asset through their securities.

Currently, 228 companies have accumulated a total of 820 000 bitcoins, with Michael Saylor’s Strategy remaining the leader with a balance of 582 000 coins, according to Bitcoin Treasures.

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According to Galaxy Digital, about 20 companies on the list, as well as a number of other firms accumulating Ethereum, Solana, or XRP coins on their balance sheets instead of bitcoin, are using the leveraged finance model pioneered by Strategy.

This spike in activity follows a key accounting rule change that went into effect in December 2024.

For example, the Financial Accounting Standards Board’s (FASB) new rule ASU 2023-08 allowed firms to account for crypto assets at fair market value, removing a major hurdle to institutional adoption, said David Duong, the global head of research at Coinbase Institutional.

Previously, firms could only write down the value of their bitcoin assets for impairment, with no indication of unrealized gains. Strategy implemented the new accounting treatment earlier this year.

While corporate adoption of cryptocurrencies is growing, Duong warned that the emergence of publicly traded cryptocurrency instruments focused solely on asset accumulation introduces “systemic risks.”

For example, many of these firms raise capital through convertible debt to buy cryptocurrencies, which makes them vulnerable to forced sale during market turmoil and could scare away investors.

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Duong noted, however, that most of the debt of these companies will not be repaid until late 2029-early 2030, making the pressure of forced sale not a problem in the short term.

However, the situation could change as the bitcoin strategy is implemented with more firms leveraging.

In the absence of a standardized funding model, tracking risk is challenging, but corporate interest remains high, and market saturation has not yet been reached. Hence, the accumulation trend has the potential to grow in the second half of 2025, according to Coinbase.

Earlier, analysts at regulated crypto bank Sygnum also noted that bitcoin’s corporate hoarding is undermining its credibility as a reserve asset for central banks.