Simply put
- Coinbase’s leading analyst warned on Thursday that a decline in BTC prices could trigger a broader crisis in the cryptocurrency market due to increased reliance on Bitcoin by public companies.
- If many companies, which collectively hold billions in BTC, need to sell their tokens to appease investors simultaneously, it might create chaotic sales across the market.
- While Coinbase expressed confidence in Bitcoin’s upward trend despite these risks, they acknowledged these challenges as systematic.
Coinbase issued a concerning alert on Thursday regarding the trading behaviors of publicly listed companies in Bitcoin. In an environment where profits are highly sought after, a sudden drop in prices could create significant turmoil.
In their crypto market outlook for the second half of 2025, Coinbase’s Head of Research, David Duon, reflected on how American firms accumulating billions in Bitcoin could be favorable in the short term but would introduce “systemic risks” to the crypto space in the longer run.
More than 100 publicly traded companies, including firms like Tesla, have been in a buying spree recently, investing billions into Bitcoin. As of now, 126 public companies collectively hold around 819,857 BTC, with a total investment exceeding $87 billion.
This situation could lead to a potential “clone attack,” where rapid drops in Bitcoin prices might have dire consequences, according to Coinbase.
Duon highlighted that the allure for public companies to invest in Bitcoin is considerable. Recent accounting regulations allowed these firms to recognize unrealized gains from cryptocurrencies, which coincided with Bitcoin’s significant price increases. Consequently, many have poured billions into cryptocurrencies, which tends to boost stock prices easily.
For example, Donald Trump’s media company recently established a Bitcoin treasury, joining a trend that companies like GameStop have also followed. However, Duon pointed out that if Bitcoin prices start to decline, these companies might struggle to fulfill investment obligations, leading them to sell their digital assets—possibly at a loss.
Duon noted the concern about widespread liquidation from multiple firms. If a decline occurs, these companies might start rushing to sell to meet obligations, contributing to market instability before the underlying debt issues materialize.
Some analysts assert that any resulting crisis may not replicate the severity of past crashes. They remain optimistic about Bitcoin’s potential, though still consider the possible impacts from a market downturn as significant.
Recently, Standard Charter also raised alarms, projecting that if Bitcoin falls below $90,000, about half of the non-crypto public companies with Bitcoin in their treasury could be in the red.
Last month, Coinbase’s CEO Brian Armstrong mentioned that previously, going all-in on Bitcoin reserves would have been considered a risky strategy.
