Overleveraged Crypto Treasury Firms Dey Mirror CDO Risks
Former Goldman Sachs analyst Josip Rupena dey warn say crypto treasury firms wey get too much leverage dey add management, cybersecurity and liquidity risks to bearer assets like Bitcoin, e dey look like the palava wey CDO-like securitization get. These firms fit face forced liquidations if dem get margin calls, wey go cause quick sell-offs wey go make market downturn worse.
Right now, 178 public companies dey hold Bitcoin for their balance sheets, some of dem dey diversify into altcoins like Toncoin (TON), XRP, Dogecoin (DOGE) and Solana (SOL). Safety Shot wey use BONK as im primary reserve asset reduce im share price by 50%, e show say investors no too happy with illiquid holdings. Market watchers dey warn say if crypto treasury firms rush cover debt, e fit increase contagion risks and weigh down crypto prices.
To reduce these systemic wahala, investors and boards suppose insist on transparency for holdings, strong custody arrangements and regular stress tests. Strong governance frameworks, independent risk oversight, clear leverage limits and fiat liquidity buffers fit help stop forced asset sales and protect market stability.
Bearish
News say crypto treasury companies wey too dey borrow money dey face forced liquidation because dem no fit meet margin calls mean say system risk don increase and e fit make market sell mark quick-quick. For short time, traders fit move their assets go another place or reduce how much dem hold the affected tokens so that dem no go suffer wahala from market wahala, this one fit make prices go down. For long term, if transparency and governance no improve for these companies, e fit make people no trust market again, e go slow down institutional adoption and make crypto market still dey bearish for longer time.