As Bitcoin continues to secure a place in corporate finance, more companies are beginning to adopt BTC as part of their treasury strategy.
These firms are following the lead of MicroStrategy, the business intelligence company that first started adding Bitcoin to its balance sheet in 2020. While this trend appears to be gaining momentum, not everyone is confident that these new entrants are prepared for the risks involved.
Max Keiser, a well-known Bitcoin advocate, remains sceptical of the ability of these companies to handle a full market cycle, especially when a severe downturn strikes.
Can the New Bitcoin Adopters Withstand the Volatility?
Choosing to hold Bitcoin in a company treasury is a deliberate and unconventional financial decision.
Rather than relying solely on traditional fiat currencies like the US dollar or euro, companies pursuing this strategy shift part of their reserves into cryptocurrency.
The reasons vary but often include protection against inflation, a desire to diversify assets, and a belief in Bitcoin’s long-term value due to its fixed supply of 21 million coins.
However, the volatility of Bitcoin requires careful adjustments in a company’s financial planning and risk management.
MicroStrategy became the most prominent example when it began converting large portions of its cash reserves into Bitcoin under the leadership of Michael Saylor.
The company viewed Bitcoin as a superior store of value, especially in an environment where governments continue to print money through stimulus programmes and quantitative easing.
MicroStrategy’s commitment went beyond financial strategy. It required board-level approvals, revised risk frameworks, and the implementation of secure custodial services and cold storage solutions. The company integrated real-time monitoring tools to manage its holdings effectively.
Despite these preparations, Bitcoin’s price swings remain a serious challenge. In bullish periods, firms can see significant gains, but during bearish phases, unrealised losses can drag down a balance sheet.
From an accounting perspective, Bitcoin is categorised as an intangible asset, meaning firms cannot reflect unrealised profits on their books but must report impairment losses when the price falls.
This creates an imbalance in how financial performance is reported, which may not sit well with traditional investors.
Moreover, regulatory scrutiny and media attention tend to increase when a company holds cryptocurrency, adding further pressure on executive teams. In this landscape, only companies with genuine conviction may be able to hold firm when the market turns against them.
Keiser Warns: Newcomers May Not Survive the Next Crypto Winter
Max Keiser has been one of Bitcoin’s most vocal supporters for years, but he is not convinced that the recent wave of corporate Bitcoin adopters is ready for the responsibility.
While he acknowledges that MicroStrategy has set a strong example by continuing to accumulate Bitcoin regardless of market conditions, he believes a true downturn has not yet tested most newcomers.
According to Keiser, the absence of experience in navigating a crypto winter could cause these companies to panic and sell at the worst possible time.
Keiser’s concerns are centred around the possibility of a widespread sell-off during the next major correction.
If companies begin offloading their Bitcoin holdings during a crash, it could apply downward pressure on the price and damage Bitcoin’s credibility as a reliable institutional asset.
This scenario would starkly contrast MicroStrategy’s approach, which is rooted in long-term conviction and unwavering belief in Bitcoin’s future role in global finance.
Recent corporate announcements illustrate the growing interest. Trump Media has announced plans to raise $2.5 billion to acquire Bitcoin. GameStop has pledged $500 million.
A new company called Twenty One has launched with an initial holding of 42,000 Bitcoin. Despite these significant sums, the market response has not been enthusiastic. Trump Media’s share price has declined by 20%, and GameStop has seen a 17% drop. This suggests that investors are not fully convinced these companies can manage a Bitcoin strategy effectively.
The difference, according to Keiser, lies in intent. MicroStrategy treats Bitcoin not just as an asset, but as a core principle of its financial philosophy. Its decision to go all in on Bitcoin was made during a time when few others were willing to take that risk.
In contrast, these newer entrants appear to be reacting to Bitcoin’s growing popularity and treating it as a trend worth following.
This reactive mindset may not be strong enough to withstand the challenges that come with holding such a volatile asset. Without a firm belief in Bitcoin’s long-term value, these companies may not be able to weather the storm.
Conclusion
The decision to adopt Bitcoin as a treasury asset is not a light one. It requires deep conviction, thorough risk planning, and the ability to maintain a long-term perspective even during market downturns.
While more companies are beginning to explore this path, Max Keiser’s scepticism highlights an important point. It is easy to join the Bitcoin movement during bullish phases, but only those with true belief in its principles are likely to survive the next bear market.
Whether these new companies have what it takes remains an open question, and only time will reveal who is genuinely committed and who is simply chasing the spotlight.
Contributor: Lydicius