Coinbase sounds alarm on corporate Bitcoin hoarding

Public firms are using borrowed funds to buy Bitcoin, raising concerns about forced selling during downturns.

Coinbase warned that a corporate Bitcoin buying spree could trigger major market instability if prices decline.

Coinbase has raised concerns over the growing number of listed companies allocating significant funds to Bitcoin reserves. In its latest market outlook, the exchange warned that while the trend may appear bullish in the short term, it introduces potential systemic risks to the wider crypto sector.

Following changes to accounting standards last December, firms are now permitted to report unrealised gains from crypto assets. The shift has sparked a surge in demand, with 126 public companies currently holding over 819,000 BTC—valued at more than $87 billion.

Many of these companies have used debt financing, often via convertible bonds, to build their Bitcoin positions.

Coinbase cautioned that a downturn in Bitcoin’s price could trigger widespread selling, as companies attempt to repay creditors. Such a scenario could lead to market-wide liquidations and sharp instability, well before any actual defaults occur.

Despite this warning, Coinbase remains confident in Bitcoin’s long-term trajectory.

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