TL;DR
- Morningstar DBRS warned that incorporating bitcoin and other cryptocurrencies into corporate treasury reserves significantly increases companies’ credit risk.
- The concentration of holdings, asset volatility, liquidity challenges, and counterparty exposure complicate financial management and heighten the vulnerability of corporate balance sheets.
- Approximately 3.68 million BTC, equivalent to $428 billion, are held across companies, funds, governments, and custodians.
Morningstar DBRS highlighted that companies adding bitcoin and other cryptocurrencies to their treasury reserves face a substantial rise in credit risk.
What Does Morningstar Base This On?
Morningstar noted that regulatory uncertainty, digital asset volatility, liquidity issues, counterparty exposure, and custody challenges increase the financial complexity of these firms. According to the report, concentrated holdings and reliance on a limited number of tokens amplify balance sheet vulnerability.
Corporate use of cryptocurrencies has moved beyond payments, with several companies now maintaining them as core treasury reserves. Data from BitcoinTreasuries.net show that roughly 3.68 million BTC, equivalent to $428 billion as of August 19, are distributed among companies, exchange-traded funds, governments, DeFi protocols, and custodians.
This represents about 18% of BTC’s circulating supply. Funds account for around 40% of these holdings, while public companies hold 27%, with extreme concentration in Strategy (MSTR), which controls over 629,000 BTC, equivalent to 64% of all corporate treasury holdings.
Reliance on bitcoin in corporate treasuries creates liquidity challenges, especially during periods of high volatility. Sharp swings in BTC value can complicate financial management and increase exposure to substantial losses. In addition, different tokens carry unique technological and governance risks, requiring companies to carefully assess each asset before adding it to their reserves. Custody, whether handled internally or through third parties, remains critical to safeguarding digital funds.
Concentrated Exposure and Regulatory Uncertainty
Morningstar DBRS also emphasized that concentrated exposure and regulatory complexity could change how credit markets evaluate corporate strength. Adoption of cryptocurrency-based treasury strategies is growing, led by companies such as Strategy and MARA Holdings (MARA), but the soundness of these financial decisions depends on the ability to manage volatility and comply with existing legal frameworks.
The Morningstar report underlines that, although corporate interest in cryptocurrencies continues to rise, the combination of concentration, price fluctuations, and uncertain regulation requires careful assessment of the sustainability of holding digital assets on corporate balance sheets
