The threat of selling by corporate BTC holders is a ‘systemic risk’ to markets: Coinbase

Public companies using leveraged positions to acquire Bitcoin could put the markets at a systemic risk, according to the Coinbase monthly outlook for June. The crypto exchange stated that there’s a possibility of both forced and discretionary selling pressure in the crypto market, even as overall sentiment appears positive for the second half of 2025.

Coinbase’s research team has identified roughly 228 publicly traded companies that now hold over 820,000 BTC collectively. Only 20 financial firms have a subset actively mimicking the high-risk, debt-financed accumulation model used by firms like Strategy (formerly MicroStrategy). 

These companies issue debt, often in the form of convertible notes, to raise capital used almost exclusively for crypto accumulation.

Institutional leveraged crypto holdings could lead to sell-offs

According to Coinbase, these firms have little to no operating revenue outside of their digital asset holdings and are trading at a premium relative to their underlying net assets. 

Accounting standards introduced by the Financial Accounting Standards Board (FASB) in December 2023 allow companies to report digital assets at fair market value. It removed prior constraints that required marking down losses without recognizing unrealized gains. 

The accounting change, effective from December 2024, helped companies create Bitcoin-focused treasury strategies and what Coinbase terms “publicly traded crypto vehicles” (PTCVs).

Coinbase mentioned two risks with PTCVs, the first being forced selling, where companies may have no choice but to offload holdings to service debt if refinancing is unattainable. 

Much of this debt, issued during periods of low interest rates, will come due between 2029 and 2030, but some notes have early redemption features as soon as 2026.

Chart data in the report shows that firms like Strategy, Riot, and Semler Scientific have billions in outstanding convertible notes. 

Long-term maturity may reduce the immediate risk, but Coinbase warns that if market conditions deteriorate or interest rates spike, they may be forced to sell assets as they would likely fail to refinance debts.

The second risk is motivated discretionary selling, where firms might choose to sell portions of their crypto to fund operations or cash flow needs. Even without financial distress, given their large accumulation numbers, such liquidations could trigger negative market sentiment. If prices fall, other entities may rush to exit.

“Even a relatively small unexpected sale by one of these entities could destabilize investor confidence and lead to a broader liquidation event,” Coinbase wrote. 

Relief from economic stability 

Coinbase reiterated that the US economy has shown stronger-than-expected growth, with recession fears largely receding. The Federal Reserve Bank of Atlanta’s GDPNow estimate rose from 1.0% in early May to 3.8% by June 5. Coinbase believes the change supports asset prices and reduces the likelihood of an economic downturn.

That said, the US Treasury yield curve, especially with 30-year bond yields, clocked 5.15% on May 21, a two-decade high. Rising long-term rates could tighten financial conditions, increase borrowing costs, and stifle the growth of debt-heavy PTCVs.

According to a chart within the report, there is a correlation between macroeconomic stress and crypto market volatility. If long-dated yields rise too quickly, equity and credit markets could experience a slump, indirectly affecting leveraged crypto firms.

Still, Coinbase insisted that the outlook for Bitcoin is mostly positive, owing to the decline of the US dollar’s dominance and a boost in global liquidity. On the flipside, altcoins may struggle to match Bitcoin because they have weaker institutional demand and higher volatility.

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