Welcome to the US Crypto News Morning Briefing—your essential rundown of the most important developments in crypto for the day ahead.
Grab a coffee to read what Standard Chartered thinks are the key levels to watch as Bitcoin (BTC) price’s next directional bias remains elusive. The pioneer crypto recently reclaimed the $105,000 threshold after descending to the $103,000 range and is now filling a symmetric triangle.
Crypto News of the Day: Standard Chartered Flags Risks in Corporate Bitcoin Treasuries
Standard Chartered Bank has flagged a growing risk in the corporate adoption of Bitcoin, warning that balance sheet holdings could shift from bullish support to a source of downside pressure.
According to Geoff Kendrick, Head of Digital Assets Research, 61 publicly listed companies now hold 673,897 BTC. This represents about 3.2% of Bitcoin’s total eventual supply.
While these corporate treasuries have added to Bitcoin’s demand, Kendrick says many are now vulnerable to price volatility.
“Bitcoin treasuries are adding to Bitcoin buying pressure for now, but we see a risk that this may reverse over time,” Kendrick said in an email to BeInCrypto.
A particular concern is that many firms purchased Bitcoin at high prices, leaving them exposed if prices fall significantly.
Specifically, a large portion of this BTC has been acquired at average purchase prices above $90,000, which is risky given current market volatility.
According to the Standard Chartered executive, the trend could mirror past liquidations like Core Scientific’s collapse in 2022.
Kendrick said companies typically face pressure when Bitcoin falls 22% below their cost basis.
“We identify a pain level of 22% below the average purchase price as a potential liquidation level,” he explained, citing the 2022 downfall of Core Scientific as a precedent.
Bitcoin (BTC) Price Performance. Source: TradingView
A decisive candlestick close below the lower trendline or the upper boundary of the symmetric triangle could determine Bitcoin’s next directional bias.
MicroStrategy Leads, But “Imitators” Face Greater Risk
Meanwhile, MicroStrategy (now Strategy) remains the dominant force in the Bitcoin treasury sector.
The firm holds approximately 86% of all corporate-held BTC, with an average acquisition price of $70,000. BeInCrypto reported its most recent acquisition in a recent US Crypto News publication.
However, Kendrick emphasized that newer entrants, termed “MSTR imitators,” have doubled their collective holdings over the past two months, owning just under 100,000 BTC.
Unlike MicroStrategy, many of these firms bought in at even higher prices, further amplifying their exposure.
“Most of the Bitcoin corporate treasuries in our sample, 58 out of 61, have NAV multiples above 1. For now, we think this is justified by market inefficiencies, including regulatory hurdles to investor access and conservative investment committee processes,” Kendrick explains.
Based on this, he warned that as these inefficiencies erode over time, the positive pressure from corporate buyers is likely to dissipate.
In his opinion, this would leave a void that may accelerate market declines.
“Corporate treasuries could flip from a source of upward buying pressure to a driver of volatility and downside risk,” he concluded.
Bitcoin’s future is increasingly tethered to boardroom decisions and balance sheet allocations. Against this backdrop, corporate behavior may now wield greater influence over the crypto market than ever before.
It is worth noting that Kendrick’s fears align with those of Bitcoin pioneer Max Keiser. A recent US Crypto News publication highlighted Keiser’s opinion that following MicroStrategy could backfire for Jack Mallers’ Twenty One Capital.
“There’s a big difference between a company with a Bitcoin treasury strategy and a Bitcoin strategy company…Twenty One Capital is a company that is looking to buy lots of Bitcoin, which is very volatile. I question if they can effectively harness that volatility like Strategy does…A Bitcoin strategy company is inherently riskier, with no clear path to be as competitive as Strategy in leveraging market volatility to capture more Bitcoin,” he stated,” Keiser told BeInCrypto.
According to Keiser, MicroStrategy will remain the big winner, with dozens of knock-offs trying to catch them but failing to generate the same returns. Steven Lubka, the Head of Swan Private Wealth, took a similar stance.
Chart of the Day
Average Bitcoin purchase prices of known public Bitcoin treasuries. Source: Bitcoin treasuries Byte-Sized Alpha
Here’s a summary of more US crypto news to follow today:
