Corporate BTC Holdings Hit $75B, Heightening Market Crash Fears – Politico

More than 60 global companies bought 673,000 BTC worth roughly $75 billion by converting stock and debt sales into crypto holdings, according to Standard Chartered data from May reported by Politico. Trump Media & Technology Group plans to sell $1.5 billion in stock and $1 billion in debt this quarter to purchase Bitcoin.

The corporate buying surge coincides with President Trump's goal to make America the “undisputed Bitcoin superpower.” Bitcoin recently reached nearly $112,000 as Trump administration regulators eased enforcement and Congress advanced crypto-friendly laws.

Read on: Bitcoin Overtakes Google to Become 6th-Largest Global Asset

Lawmakers Warn of Economic Spillover Risk

Senator Elizabeth Warren warns that, unlike the 2022 crypto crash that stayed within the digital asset space, widespread corporate Bitcoin holdings could trigger layoffs and business failures across multiple sectors during the next downturn. 

If businesses start piling crypto onto their balance sheets, the next bust won't be so contained,

Warren said.

Strategy, originally a business analytics company, pioneered the corporate Bitcoin strategy and transformed into a crypto investment firm. Companies like Metaplanet and Trump-backed American Bitcoin adopted similar approaches. Many newer firms focus entirely on buying and holding BTC, with some adding other digital tokens.

Related: Real Vision or Just Hype? The Founders of American Bitcoin Make Their Case

These companies raise money cheaply through stock and debt offerings, then buy Bitcoin directly. Their share prices have climbed alongside crypto's rally. However, debt-funded crypto purchases create risks during market downturns when companies face margin calls and forced sales that could worsen any selloff.

Experts Predict “Catastrophic” Market Impact

“It's a lot of kindling being built up,” said Nic Carter from Castle Island Ventures. “There's going to be a forest fire, and it's going to be catastrophic.” Short-seller Jim Chanos called the strategy a “financial perpetual motion machine” that will fail when prices drop. Columbia University's Omid Malekan noted that institutions often regret getting caught up in market booms during subsequent crashes.

Related: U.S. Regulator Orders Bitcoin and Crypto Inclusion in Mortgage Assessments

Corporate Bitcoin treasuries started in 2020 but remained limited until this year's surge in interest. Supporters claim BTC provides portfolio variety and protection against inflation, while critics point to extreme price swings and a lack of income generation.