Bitcoin (BTC) buys a growing number of public companies for their balance sheets, but many can be exposed to considerable losses if prices fall, according to a new standard charter report shared with CryptoSlate.
The bank’s research, written by Head of Digital Assets Research Geoffrey Kendrick, emphasized that 61 companies now have Bitcoin in their business treasury chest, and collectively control 3.2% of the total Bitcoin offer that will ever exist.
This trend has risen in recent months, with imitators in the footsteps of the strategy have increased their bitcoin companies from 50,000 BTC to 100,000 BTC in just two months.
High access prices
Standard Chartered warned that many of these companies entered the market at high ratings, often with net asset value (NAV) input multiples above 1, which signals overexposure of price fluctuations.
Kendrick emphasized that for at least half of these companies the average purchase price is greater than $ 90,000 per bitcoin and even a modest correction can lead to losses and reputation damage for companies that want to imitate strategy without comparable riskolerances or capital structures.
He warned that “Bitcoin is volatile” and such high average access points make some companies particularly vulnerable.
According to Kendrick:
“We identify a pain level of 22% below the average purchase price as a potential liquidation level.”
He explained that a decrease of 22% below the average purchase price can be the threshold where the liquidation risk becomes realistic for companies that keep Bitcoin in treasuries.
Based on historical market events, the report called Core Scientific experience as an indicator for potential stress levels.
The report included a graph with a broad spread in purchase prices at public companies, with a lot clustered in $ 90,000 to $ 110,000. If markets are struggling, companies with thinner balance sheets or investor pressure can be forced to sell.
The demand is increasing despite risks
Despite the risks, the role of Bitcoin continues to get a strategic treasury activity from companies. Kendrick attributed this to NAV -Meervouden above 1 and persistent inefficiencies in how traditional finances evaluates crypto companies.
The findings of Standard Chartered suggest that this wave of adoption is powered by both long-term convictions and the fear of missing, especially in the light of recent Bullish Momentum in Crypto-markets.
Kendrick wrote:
“Although I see these multiples justified for the time being (because of the inefficiencies of the market created by the conservatism of the regulations and the investment committee), that justification will blur over time.”
While Bitcoin acts above $ 100,000, the momentum trade remains intact. However, the warning from Standard Chartered adds carefully: without careful risk management, companies that embrace BTC can experience the same volatility that once pushed miners and speculators to the edge.
