Fitch Warns Bitcoin-Backed Securities Pose High Market Value Risk

Fitch Ratings has warned that Bitcoin-backed securities, which pool BTC or related assets to issue debt, carry "heightened risks" aligning with speculative-grade credit profiles, potentially complicating their adoption by institutional investors. The agency cited Bitcoin's inherent price volatility and counterparty risks, referencing the failures of crypto lenders like BlockFi and Celsius during the 2022–2023 downturn as cautionary examples. Fitch noted that sharp price declines can rapidly erode collateral value relative to issued debt, triggering margin calls. This assessment contrasts with spot Bitcoin ETFs, which Fitch suggested might see dampened volatility due to a more diverse holder base, though the warning primarily targets credit instruments directly dependent on collateral value.

(Source：Cointelegraph)