Why a Bitcoin Treasury Strategy Is Risky: Analyst
SolarBank plans to add Bitcoin to its balance sheet, joining a trend among public companies accumulating the cryptocurrency. Analyst Geoffrey Kendrick from Standard Chartered warns that this strategy carries risks, noting that imitators of the initial strategy have increased their Bitcoin holdings to nearly 100,000, with higher average purchase costs. Approximately half of the Bitcoin treasuries held by 61 non-crypto public companies could face losses if Bitcoin drops below $90,000. Current trading price is around $106,000. Kendrick suggests that Bitcoin's price volatility may lead to lower average purchase prices for new treasuries, potentially driving down Bitcoin's value over time. As of now, 223 entities hold Bitcoin, valued at $359.7 billion, reflecting a 7% increase in holdings over the past month. Despite concerns, Kendrick maintains a bullish outlook, predicting Bitcoin could reach $500,000 by the end of President Trump's second term.
