Bitcoin’s slides to $70,000 triggering structural crisis that could make FTX collapse look like child’s play

Bitcoin's recent drawdown toward $70,000 is testing the viability of the corporate treasury model, where companies fund Bitcoin purchases by issuing equity or debt. This strategy relies on rising prices and favorable equity premiums, but falling BTC prices compress these premiums, potentially forcing a 'sell to survive' scenario, as warned by investor Michael Burry. MicroStrategy, holding Bitcoin at an average cost of $76,052, faces significant unrealized losses if BTC drops further, potentially closing its access to capital markets for new issuance. While some analysts, like Charles Edwards, compare the 200 existing Digital Asset Treasury (DAT) firms to the 1929 investment trusts, predicting a massive unwind, others, like Adam Livingston, argue the comparison is flawed due to the transparency and single-asset nature of these firms, lacking the circular leverage of the 1920s trusts. The model requires abundant liquidity and time arbitrage; if Bitcoin remains volatile or drifts lower, these firms may pivot to balance-sheet defense, or face a cascade risk if miner distress triggers broader forced selling.

(Source：CryptoSlate)