Analysts at Franklin Templeton Digital Assets have issued a stark warning regarding the potential ramifications of corporate crypto treasuries on the market. Their latest report suggests that a sharp decline in cryptocurrency prices could be exacerbated by these corporate strategies.
Key Insights:
Franklin Templeton indicates that the establishment of corporate crypto treasuries may intensify price crashes during bearish market conditions.
Over 130 public companies have integrated Bitcoin into their reserves, raising significant capital through high-priced equity and debt offerings.
A decreasing market-to-NAV ratio may force companies to liquidate their crypto holdings, thus creating a potentially damaging self-reinforcing cycle of declining prices.
While the strategy has garnered attention for promoting institutional adoption and enhancing company valuations, the report also details the risks inherent in this model, which could lead to a destructive feedback loop in negative market scenarios.
Numerous publicly traded firms have actively sought ways to acquire Bitcoin, Ethereum, and Solana as part of their balance sheets. They have done this by raising capital through various financial instruments, including equity and convertible notes.
135 Firms Have Embraced Bitcoin as a Reserve Asset
According to data from Bitcoin Treasuries, 135 publicly listed companies have taken to this strategy specifically with Bitcoin, among them Strategy, Metaplanet, Twenty One, SharpLink, Upexi, and Sol Strategies.
Inspired by Michael Saylor’s model, these firms have raised billions since early 2024 by issuing shares at premiums relative to net asset value (NAV), effectively capitalizing on the fluctuations within the crypto market.
Franklin Templeton’s analysts pointed out the advantages of this approach, such as the ability to raise capital above NAV, making share issuance advantageous even amid market volatility.
For Proof-of-Stake cryptocurrencies like Ethereum and Solana, staking can generate additional revenue, complementing growth during bullish market conditions.
As markets rise, they can attract more investors, further propelling a positive feedback loop.
The Strategy Treasury Playbook pic.twitter.com/YXXdZmtlIm
— Franklin Templeton Digital Assets (@FTDA_US) July 2, 2025
However, the report underscored a significant risk: if the market-to-NAV ratio falls below 1, equity issuance could become dilutive, leading to diminished investor confidence and a slowdown in capital inflow.
In severe scenarios, a dramatic drop in crypto prices may compel companies to liquidate assets to bolster their stock prices, which could further depress crypto values and amplify investor anxiety.
This kind of negative feedback loop has the potential to turn a modest price correction into a cascading crash.
“The corporate crypto treasury model signifies a new era of institutional adoption, but it carries noteworthy risks,” Franklin Templeton stated, emphasizing the importance of maintaining a premium to NAV and managing market turbulence to evade perilous spirals.
Concerns from Other Analysts Regarding Bitcoin Treasuries
This cautionary note aligns with recent remarks by Matthew Sigel, head of digital asset research at VanEck, who has also expressed concerns surrounding the Bitcoin treasury strategies employed by some public companies.
Sigel highlighted the issues linked to at-the-market (ATM) share issuance programs, suggesting these can lead to dilution if company stock prices approach their Bitcoin net asset value (NAV).
To safeguard investors, he has recommended suspending ATM programs when shares trade below 0.95 times NAV for extended periods.
In parallel, New York-based law firm Pomerantz LLP has initiated a class action lawsuit against Michael Saylor’s Strategy, alleging that the Bitcoin-focused firm has misled investors regarding the profitability and risks associated with its crypto investment strategy.
Pomerantz claims that Strategy exaggerated the advantages of its Bitcoin treasury approach while downplaying the volatility and risks tied to substantial Bitcoin holdings.
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