Bitcoin's Volatility Drops Amid Corporate Stockpiling

Bitcoin's price swings have decreased this year, driven by companies rapidly stockpiling the asset. Corporate treasuries now hold over 6% of bitcoin's total supply, acting as a form of private sector quantitative easing for crypto markets. This has led to a historically low level of volatility in bitcoin's price, despite record highs in May, July, and August.

The price of Bitcoin has experienced significant volatility over the years, but recent trends suggest a stabilization driven by corporate treasuries rapidly stockpiling the asset. As of July 2025, corporate treasuries hold over 6% of Bitcoin's total supply, acting as a form of private sector quantitative easing for crypto markets. This increased holding has contributed to a historically low level of volatility in Bitcoin's price, despite record highs in May, July, and August.

Over 900 public companies have leveraged Bitcoin as a reserve asset, with Strategy (formerly MicroStrategy) leading the charge. As of August 2025, these companies collectively hold 948,000 BTC ($106.45 billion) [1]. The appeal of Bitcoin lies in its low correlation to traditional assets and its role as a hedge against inflation. Companies like Strategy have raised capital through convertible notes and at-the-market offerings to fund Bitcoin purchases, with Michael Saylor’s firm now holding 629,000 BTC ($71 billion) [6].

However, the strategy is not without risks. Bitcoin's high volatility—averaging 78.93% swings—poses a significant threat to leveraged positions. A 20% drop in Bitcoin’s price could trigger margin calls for firms with high leverage ratios [2]. Additionally, the financial engineering behind these strategies introduces dilution risks. For example, Strategy's stock has underperformed Bitcoin itself, with its market cap trading at a 30% discount to its Bitcoin holdings [5]. This "value gap" raises questions about the sustainability of the model during downturns.

The concentration of Bitcoin holdings among a handful of firms amplifies systemic risks. The top 20 public companies control 94% of corporate Bitcoin reserves, with Strategy alone holding 64% of that total [5]. This centralization creates a domino effect, where the collapse of a single firm could destabilize the broader market. Amdax's Amsterdam Bitcoin Treasury Strategy (AMBTS), which aims to accumulate 1% of Bitcoin’s total supply, illustrates the scale of institutional bets [1].

Regulatory clarity, such as the U.S. GENIUS Act, has normalized corporate crypto holdings, but it hasn’t eliminated risks. Morningstar DBRS warns that Bitcoin’s regulatory uncertainty, liquidity challenges, and custody issues could raise credit risks for firms with heavy exposure [1]. Meanwhile, new accounting standards like ASU 2023-08 have forced companies to report unrealized losses, compounding financial strain [3].

Legal challenges are also mounting. A recent class-action lawsuit against Strategy, though dropped, highlighted concerns over overstating the profitability of its Bitcoin strategy and understating volatility risks [2]. Investors are increasingly skeptical of firms that prioritize Bitcoin over operational performance, as seen in the backlash against Saylor’s financing tactics [6].

Despite these risks, the Bitcoin corporate treasury model’s viability hinges on balancing growth with governance. Firms that maintain strong mNAV premiums and transparent execution, like Block, appear better positioned to weather volatility [4]. However, for companies like Strategy, the path forward is uncertain. With Bitcoin’s price peaks and troughs becoming more extreme, the question isn’t whether the model can survive, but how long it can before the risks outweigh the rewards.

As institutional adoption accelerates, the market must grapple with a paradox: Bitcoin’s promise as a hedge asset is undermined by the very volatility that makes it attractive. For Saylor and his imitators, the looming crisis may not be Bitcoin itself, but the fragile financial architecture built atop it.

References:
[1] Corporate Bitcoin Treasuries Could Raise Credit Risks ... [https://www.coindesk.com/markets/2025/08/21/corporate-bitcoin-treasuries-could-raise-credit-risks-morningstar-dbrs-says]
[2] Bitcoin in Corporate Treasuries: A Double-Edged Sword for Financial Stability [https://www.ainvest.com/news/bitcoin-corporate-treasuries-double-edged-sword-financial-stability-credit-risk-2508/]
[3] The $110 Billion Crypto Treasury Boom: Litigation Risks on ... [https://www.jdsupra.com/legalnews/the-110-billion-crypto-treasury-boom-3844777/]
[4] The Bitcoin Treasury Model Is Breaking, but Strategy’s Isn’t [https://cointelegraph.com/explained/the-bitcoin-treasury-model-is-breaking-but-strategys-isnt-heres-why]
[5] Michael Saylor hit by market revolt as his Bitcoin premium ... [https://fortune.com/crypto/2025/08/28/michael-saylor-strategy-microstrategy-bitcoin-premium-sinks/]
[6] Strategy Signals Third Bitcoin Treasury Buy in August [https://bitbo.io/news/strategy-third-bitcoin-buy/]