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Talk about the concentration of risk.
The two largest publicly listed bitcoin treasury firms alone are sitting on paper losses big enough to rival the market value of major cryptocurrencies with strong use cases.
Early Thursday, Tokyo-listed Metaplanet (3350) revealed a paper loss of $1.5 billion on its 43,000 BTC as of end-June. Last month, Strategy (MSTR), the world’s largest public digital asset treasury (DAT) company, reported a comparable paper loss of $8.2 billion. Combined, that’s nearly $10 billion.
To put the scale into perspective: If these losses were tokenized, the resulting “Loss Token” would be the 11th largest digital asset by market value, just behind dogecoin and well ahead of tokenized Treasury coins such as ONDO, privacy leaders like ZEC and DeFi giant AAVE.
This trend underscores the extreme financialization of bitcoin and the concentration of risk in a single token.
Compounding the issue, many DAT firms have consistently favored issuing debt to fund purchases of BTC. That strategy raises the question of how different they are from governments that borrow heavily to fund investments that fail to generate adequate returns. Both, ultimately, lead to high indebtedness relative to income. As we have noted before, bitcoin lacks inherent yield, return or cash flow.
For now, however, the market doesn’t appear to be worried about these dynamics. BTC continues to trade between $62,000 and $66,000, as it has for weeks, with today’s price action largely below $64,000.
Some analysts say they remain optimistic that the bear market has run its course, pointing to a price range that corresponds with the previous bull-cycle high.
“The peaks of the 2021 bull market were close to these levels,” Alex Kuptsikevich, the chief analyst at FxPro, said in an email. “Three years ago, Bitcoin’s decline generally halted at $20K, which was close to the peak of the previous bull market at the end of 2017. This supports our view that the decline may have run its course, with bearish momentum fading as Bitcoin approaches the 200-week moving average.”
Other analysts have turned their focus to August’s Jackson Hole symposium of central banks and economic data for trading cues. Stay alert!
Read more: For analysis of today's activity in altcoins and derivatives, see Crypto Markets Today . For a comprehensive list of events this week, see CoinDesk's "Crypto Week Ahead."
The chart tracks price swings in bitcoin and the S&P 500 since October last year.
While the equity index has surged to record highs, the price of bitcoin has remained choppy, hovering in the low $60,000s.
Most analysts anticipate a rotation of capital into BTC once stocks stop rallying and turn lower. That said, the cryptocurrency already failed that test over the past 12 months, slumping from its peak of $126,000 despite a risk-on backdrop in equities.