- Bitcoin treasury firms carried about $12.7B of excellent debt, with Technique accounting for $8.2B.
- Galaxy’s Alex Thorn dismissed latest blow-up considerations, stating that their debt will mature in two years.
Galaxy Digital has downplayed considerations that Bitcoin [BTC] treasury firms’ debt-burden blow-up may set off the following bear market part.
In an X (previously Twitter) post on Wednesday, Galaxy’s Head of Analysis, Alex Thorn, mentioned that the debt worries are “overblown.”
“I know some are worried about the bitcoin treasury companies and their debt becoming a problem, but for now, we think those fears are overblown.”
He added that the problem wasn’t a priority now as a result of many of the debt maturity will start from 2027.
Supply: Galaxy
BTC treasury companies’ $12.7B debt
Particularly, most analysts have flagged Michael Saylor’s Technique (previously MicroStrategy) as a threat issue, given the perceived large debt used to amass its 580.9K BTC holdings.
Notably, Technique, alongside different public firms like MARA, owns 3.65% of the full BTC provide, underscoring market threat in case they go bankrupt.
In line with one user, the businesses may set off the following bear market.
“Bitcoin treasury companies won’t prevent another bear market; they’re the reason it’ll happen again this cycle.”
There was debate that the companies might assist cut back the affect of the following large BTC drawdown. In truth, Bernstein analysts lately projected that these companies may drive +$330B inflows to the asset by 2029.
However others doubted whether or not the brand new Technique copy-cats may survive a bear market. In truth, Max Keiser, BTC advisor to El Salvador’s Nayib Bukele, said,
“Saylor never sold, and just kept buying, even when his BTC position was underwater. It’s foolish to think the new Bitcoin Treasury Strategy clones will have the same discipline.”
An identical warning was shared by Customary Chartered’s Head of Digital Belongings Analysis, Geoffrey Kendrick. In a letter to shoppers this week, he wrote,
“Bitcoin treasuries are adding to Bitcoin buying pressure for now, but we see a risk this may reverse over time…They could become a source of downside price pressure and volatility.”
Galaxy Digital’s report acknowledged the debt concern by treasury firms, particularly Technique.
“As of May 27, there was at least $12.703 billion of outstanding debt carried by bitcoin treasury companies. Strategy carries the most outstanding debt at $8.214 billion, accounting for 64.66% of the observed outstanding debt.”
Nonetheless, the report maintained that the majority Technique’s debt matures in 2027-2030, and shouldn’t be a difficulty within the mid-term.
| CoinFN
