Coinbase Warns of Systemic Risks from Corporate Bitcoin Leveraging

Coinbase has issued a warning regarding the potential systemic risks associated with corporate entities acquiring Bitcoin through leveraged positions. The firm's June outlook highlights that 228 publicly traded companies collectively hold approximately 820,000 BTC, with at least 20 of these companies following a financing model inspired by Strategy, which involves issuing convertible debt to purchase Bitcoin. This strategy could lead to forced sales during market stress periods, although Coinbase notes that the maturity dates for most of this debt, scheduled between 2029 and 2030, mitigate immediate downside risks.

The revision of U.S. accounting rules in December 2024 has allowed companies to report the market value of their crypto holdings, eliminating a previous restriction that required firms to record losses without recognizing unrealized gains. This change has spurred corporate interest in building leveraged positions in Bitcoin. Coinbase's outlook for the second half of 2025 is bullish, driven by stronger economic data, lower interest rates, and rising corporate demand. The firm anticipates new Bitcoin all-time highs in 2025, supported by improved economic expectations in the United States, the possibility of interest rate cuts, and increased corporate adoption.

However, Coinbase cautions that the accumulation of cryptocurrencies by companies operating with leveraged debt presents a systemic risk. The firm warns that this dynamic could create a scenario where forced selling triggers a cascade of market disruptions, potentially leading to devastating consequences. The U.S. Congress is moving forward with regulations on stablecoins and ETFs, which could reshape crypto market rules before the end of the year. These regulatory developments, along with the SEC’s review of ETF proposals, are expected to reduce uncertainty in the coming months and support risk assets such as cryptocurrencies.

On the macroeconomic front, recession concerns in the U.S. have eased after a brief GDP contraction earlier this year. Recent data points to a recovery, with projections indicating 3.8% growth in early June. This improvement, combined with expectations of greater global liquidity and a reduced impact from trade tariffs, would support risk assets such as cryptocurrencies. Coinbase's outlook underscores the need for caution as the market navigates these potential risks, emphasizing the importance of regulatory clarity and prudent corporate strategies in mitigating systemic risks.