Latest news with #GeoffKendrick
CNBC
4 days ago
- Business
- CNBC
Strategy imitators pushed bitcoin to new records. Why Standard Chartered sees that buying pressure reversing
The number of companies that buy bitcoin to hold on their balance sheet has grown in recent weeks, helping the leading cryptocurrency to hit its recent all-time high. But that newfound corporate support could soon become a downside risk to bitcoin's price, according to Standard Chartered. While Strategy , formerly MicroStrategy, is the poster child for the bitcoin acquisition strategy by corporate treasuries, "imitators" have been gaining ground, Standard Chartered said in a report out Tuesday. Holdings by bitcoin treasuries have doubled in the last two months to just below 100,000 bitcoins, but their average purchase prices are far higher than Strategy's in most cases, the note said. Reversal risk "Bitcoin treasuries are adding to bitcoin buying pressure for now, but we see a risk that this may reverse over time," Standard Chartered analyst Geoff Kendrick wrote. "Most of the bitcoin corporate treasuries in our sample … have [net asset value] multiples above 1. For now, we think this is justified by market inefficiencies, including regulatory hurdles to investor access and conservative investment committee processes. But as these inefficiencies are eventually removed, we think bitcoin treasuries could become a source of downside price pressure and volatility." Bitcoin's notorious volatility could well push its price below the average paid by many corporate treasury departments reasury, Kendrick added. Half of them would be underwater if bitcoin fell below $90,000, he estimated. Should bitcoin drop more than 22% below companies' average purchase prices, they could become forced sellers, he said. Pain threshold "The question then becomes, how much pain can companies withstand before being forced to sell their bitcoin?" Kendrick said, noting that Strategy's treasury faced its greatest challenge in November 2022, around the time of the FTX-related crash. Bitcoin halved in value, to $15,500 from $31,000, but the company continued holding its bitcoin throughout. "Perhaps because the absolute [dollar] loss was small," Kendrick suggested, "and also because U.S. spot [bitcoin] ETFs did not exist yet, so MSTR served a more important investment purpose than bitcoin treasuries do today." In today's altered crypto environment, "we do not think any of the newer entrants to the bitcoin treasury space could continue holding their bitcoin if bitcoin prices were to fall 50% below their average purchase price," the analyst added. There are 110 publicly-listed companies worldwide that own bitcoin, according to Bitcoin Treasuries. Standard Chartered monitors a sample of 61 that buy bitcoin purely to hold on their balance sheets but otherwise aren't involved in the industry. This, for example, excludes bitcoin miners, crypto exchanges, asset managers, Bitcoin ATM providers, crypto services providers and Tesla. The subgroup that Standard Chartered tracks owned a combined 673,897 bitcoins as of the end of May, accounting for 3.2% of bitcoin's maximum supply of 21 million. —CNBC's Michael Bloom contributed reporting. remains the biggest of these types of bitcoin proxies, its
Yahoo
5 days ago
- Business
- Yahoo
Today's Corporate Bitcoin Holders Could be Tomorrow's Forced Sellers: StanChart
Corporate bitcoin BTC treasuries are adding to buying pressure at the moment, but a sharp drop in the price of the world's cryptocurrency could lead to forced liquidations, Standard Chartered analyst Geoff Kendrick said in a research report on Tuesday. As many as 61 publicly listed companies have adopted the cryptocurrency as a treasury asset, and these firms now own a combined 673,897 bitcoin as of the end of May, or 3.2% of the cryptocurrency's total supply, the report said. That big number, of course, owes nearly everything to Michael Saylor's Strategy (MSTR), which by itself holds a total of 580,955 tokens. "Based on the 2022 example of Core Scientific (CORZ), we estimate that prices more than 22% below average purchase prices could lead to liquidations," wrote Geoff Kendrick, head of digital assets research at Standard Chartered. In the bear market of that year, the bitcoin miner under considerable financial pressure sold 7,202 bitcoins in June 2022 at an average price of $23,000 to raise about $167 million.. "The forced sale price (forced in the sense that creditors would no longer fund Core Scientific's business model) was just 22% below the cost of production," said Kendrick. If bitcoin were to move back below the $90,000 level, half of these bitcoin treasuries would be underwater, he added.
Yahoo
5 days ago
- Business
- Yahoo
Today's Corporate Bitcoin Holders Could be Tomorrow's Forced Sellers: StanChart
Corporate bitcoin BTC treasuries are adding to buying pressure at the moment, but a sharp drop in the price of the world's cryptocurrency could lead to forced liquidations, Standard Chartered analyst Geoff Kendrick said in a research report on Tuesday. As many as 61 publicly listed companies have adopted the cryptocurrency as a treasury asset, and these firms now own a combined 673,897 bitcoin as of the end of May, or 3.2% of the cryptocurrency's total supply, the report said. That big number, of course, owes nearly everything to Michael Saylor's Strategy (MSTR), which by itself holds a total of 580,955 tokens. "Based on the 2022 example of Core Scientific (CORZ), we estimate that prices more than 22% below average purchase prices could lead to liquidations," wrote Geoff Kendrick, head of digital assets research at Standard Chartered. In the bear market of that year, the bitcoin miner under considerable financial pressure sold 7,202 bitcoins in June 2022 at an average price of $23,000 to raise about $167 million.. "The forced sale price (forced in the sense that creditors would no longer fund Core Scientific's business model) was just 22% below the cost of production," said Kendrick. If bitcoin were to move back below the $90,000 level, half of these bitcoin treasuries would be underwater, he added.
Yahoo
29-05-2025
- Business
- Yahoo
Wall Street Ditches Gold for Bitcoin -- $9 Billion Says Everything
A quiet rotation is unfolding in U.S. markets and it's one worth watching. Over the past five weeks, Bitcoin (BTC-USD) ETFs have pulled in more than $9 billion in fresh inflows, led by BlackRock's iShares Bitcoin Trust ETF (NASDAQ:IBIT). At the same time, gold-backed ETFs have shed over $2.8 billion, Bloomberg data shows. Investors appear to be rethinking their safe-haven strategies just as U.S. fiscal concerns creep back into the spotlight from ballooning deficits to Moody's stripping the U.S. of its last AAA rating. Bitcoin recently touched a new record high of $111,980, supported by progress on stablecoin regulation and broader macro uncertainty. Standard Chartered's Geoff Kendrick points out that Bitcoin may now serve as a hedge on two fronts: against private-sector shocks like bank failures, and against government-linked risks, such as threats to Fed independence. What's more, its price movements have started to decouple from the Nasdaq, the dollar, and even gold. As Pepperstone's Dilin Wu put it, Bitcoin is beginning to behave less like a risk-on tech trade and more like a standalone asset class. Gold still leads on performance this year up 25%, compared to Bitcoin's 15%. But flows tell a different story. More capital is moving into Bitcoin, possibly signaling broader acceptance of its role in modern portfolios. Jefferies strategist Christopher Wood summed it up: I remain bullish on both gold and Bitcoin They remain the best hedges on currency debasement in the G7 world. In other words, investors aren't ditching gold they're making room for Bitcoin too. This article first appeared on GuruFocus.
Yahoo
29-05-2025
- Business
- Yahoo
Bitcoin ETFs Pull In $9 Billion as Investors Ditch Gold Holdings
(Bloomberg) -- A divergence is emerging in US exchange-traded funds as investors move from gold to its so-called digital counterpart, Bitcoin. NYC Congestion Toll Brings In $216 Million in First Four Months NY Wins Order Against US Funding Freeze in Congestion Fight NY Congestion Pricing Is Likely to Stay Until Year End During Court Case Over the past five weeks, US Bitcoin ETFs have attracted more than $9 billion in inflows, led by BlackRock Inc.'s iShares Bitcoin Trust ETF (IBIT). Meanwhile, gold-backed funds have suffered outflows exceeding $2.8 billion over the same period, according to data compiled by Bloomberg News. While easing trade tensions has cut into demand for traditional havens like gold of late, Bitcoin's perceived status as an alternative store of value is growing — just as concerns over US fiscal stability mount. Bitcoin touched a record high of $111,980 earlier this month, buoyed by favorable regulatory signals — including progress on a stablecoin bill — and rising macroeconomic uncertainty. Gold, while still up more than 25% so far this year, has pulled back from recent peaks, trading roughly $190 below its all-time high. Analysts say the rotation suggests a growing acceptance of Bitcoin as a legitimate portfolio hedge. 'I remain bullish on both gold and Bitcoin,' said Christopher Wood, global equity strategist at Jefferies. 'They remain the best hedges on currency debasement in the G7 world.' Skeptics, though, have warned that Bitcoin's volatility still undermines its status as a true haven. During past macro shocks, like the August unwinding of the yen-funded carry trade, Bitcoin fell sharply along with other risk assets. Others see Bitcoin gaining an edge. 'Bitcoin is more effective against financial system risks due to its decentralised nature,' Geoff Kendrick, global head of digital assets research at Standard Chartered, wrote in a recent note. He contrasted that with gold's stronger performance during geopolitical flare-ups like tariff escalations. Kendrick added that Bitcoin serves as a hedge through two routes: risks tied to the private sector — such as the collapse of Silicon Valley Bank in 2023 — and those tied to government institutions, including concerns over US Treasury stability. 'The recent threat to Fed independence (via Powell's potential replacement) falls squarely into the second category, along with the tariff escalation and broader concerns about US policy credibility,' he said. Adding to its appeal, Bitcoin appears to be shedding its reputation as a tech-adjacent risk asset. 'Over the past month, Bitcoin's intraday correlation with Nasdaq, the dollar, and even gold, has been remarkably low,' said Dilin Wu, research strategist at Pepperstone. 'These shifts suggest Bitcoin may increasingly be viewed as a hedge — or even a non-correlated asset class — rather than just a speculative trade.' The backdrop of fiscal strain is intensifying the debate. Moody's Ratings recently stripped the US of its last triple-A credit grade, citing ballooning deficits and debt. That downgrade brought it in line with Fitch Ratings and S&P Global Ratings, both of which already rate the US below the top tier. Still, gold remains the better performer year-to-date, with gains of about 25%, compared with Bitcoin's 15% rise. Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Inside the First Stargate AI Data Center How Coach Handbags Became a Gen Z Status Symbol ©2025 Bloomberg L.P.
