Coinbase is elevating pink flags concerning the monetary well being of publicly traded crypto autos, cautioning that debt-related obligations might quickly pressure some companies to liquidate their crypto holdings.
In a report from Coinbase, the agency emphasised issues round refinancing dangers and loan-to-value ratios, however stated most giant companies nonetheless have choices to keep away from liquidation.
“The chance of compelled promoting stress arises as a result of many of those PTCVs have issued convertible bonds to lift low-cost cash to purchase varied crypto belongings,” the report learn.
The report continued to say that if crypto costs fall and corporations can’t refinance their money owed, they could be compelled to promote their crypto holdings, triggering broader market liquidations.
Coinbase highlighted that whereas loan-to-value ratios are manageable, the flexibility to refinance is essential, and capital constructions in non-public transit capital autos are inconsistent and arduous to observe.
Optimism on account of company accumulation
Regardless of these dangers, Coinbase stays cautiously optimistic, particularly as company accumulation of crypto belongings continues. The agency sees room for development within the second half of 2025, as extra conventional corporations take curiosity in on-balance sheet crypto methods.
On the regulatory entrance, Coinbase anticipates that 2H25 can be transformative for the U.S. digital asset trade. A shift away from “regulation by enforcement” beneath the earlier administration has created momentum for brand new laws.
The STABLE and GENIUS Acts—pending within the Senate—might be reconciled right into a single invoice and signed by President Trump earlier than the August 4 Congressional recess. These payments would introduce client protections, reserve guidelines, and AML compliance necessities for stablecoin issuers.
Coinbase additionally flagged the potential influence of the Digital Asset Market Readability Act, which aims to define the regulatory roles of the SEC and CFTC. If handed, the invoice might set up a twin framework for distinguishing between “digital commodities” and “funding contract belongings.”
In the meantime, the SEC is reviewing about 80 ETF functions, together with multi-asset index funds, staking-enabled merchandise, and single-name altcoin ETFs. Selections on a number of proposals are anticipated between July and October.
Coinbase concluded that whereas compelled promoting and yield dangers persist, Bitcoin (BTC) stays well-positioned and solely choose altcoins could outperform based mostly on project-specific fundamentals.
