Standard Chartered Warns 3.2% of Bitcoin Supply at Risk of Liquidation if Price Drops Below $90,000

Standard Chartered's Geoffrey Kendrick has issued a warning about the potential risks associated with non-crypto public companies holding Bitcoin in their treasuries. Kendrick cautioned that if the price of Bitcoin falls below $90,000, these companies could be forced to liquidate their holdings, which could have significant implications for the market. This warning comes as 61 public companies collectively hold 673,897 bitcoins, representing 3.2% of the total circulating supply. The concern is that the current buying pressure from these treasuries could reverse if the price of Bitcoin drops, leading to a potential market correction.

Kendrick explained that while Bitcoin treasuries are currently contributing to the buying pressure, there is a risk that this trend could change over time. The aggressive entry of new non-crypto firms into the Bitcoin market adds to the complexity of the situation. If the price of Bitcoin were to drop below $90,000, approximately half of the treasuries held by these 61 public companies could be at risk of liquidation. This scenario could lead to a significant sell-off, potentially causing a market correction.

The warning from Standard Chartered highlights the delicate balance between institutional demand and market stability. As more companies adopt Bitcoin as part of their treasury strategy, the potential for market volatility increases. The current low percentage of Bitcoin on exchanges, driven by institutional demand and holding, signals a potential supply shock. However, the risk of liquidation at lower price points underscores the need for caution and strategic planning among companies holding Bitcoin in their treasuries.