Corporate Bitcoin Holdings at Risk: StanChart's Warning
Standard Chartered has issued a warning concerning the potential for forced liquidations of corporate Bitcoin (BTC) holdings, which currently contribute to buying pressure. This risk arises if the price of Bitcoin experiences a significant drop.
Key Findings from the Report
The report highlights that a substantial number of publicly listed companies, totaling 61, have embraced Bitcoin as a treasury asset. These firms collectively hold 673,897 BTC, representing approximately 3.2% of the cryptocurrency's total supply. A significant portion of this is held by Michael Saylor's Strategy.
Potential Trigger for Liquidations
Geoff Kendrick, a digital assets analyst at Standard Chartered, suggests that a 22% price decline below the average purchase prices could trigger forced liquidations. He draws a parallel to Core Scientific's (CORZ) 2022 experience, where financial pressures led to the sale of 7,202 Bitcoins.
"The forced sale price... was just 22% below the cost of production," Kendrick noted.
Critical Price Level
The report indicates that if Bitcoin were to fall back below the $90,000 level, half of these corporate Bitcoin treasuries would be underwater, increasing the likelihood of forced sales. This could add further pressure to the market.
