30th June 2025 > > Bitcoin Strategic Reserves.

tl;dr

An overview of the rapid growth of Bitcoin Strategic Reserves. A short discussion about contagion risk from the growing number of corporates putting BTC on balance sheet.

Market Snap

Market Wrap

BTC held on exchange seems to be heading in one direction only:

The headline rate for BTC is the one determined by retail flows on centralised cryptocurrency exchanges. The much larger OTC market for institutions, sovereigns, pension funds, and the ETFs, takes its cue from the advertised price, but rarely, if ever, transacts in that space.

One of the striking truths about this rally from around $16k to today’s price since the end of 2022 has been the noticeable lack of retail involvement, which also explains the absence of any alt enthusiasm despite the tremendous performance of BTC during that time.

That graph above may simply be a physical manifestation of the lack of retail, or it might be truly indicative of an incoming supply shock. I guess we will find out soon enough.

Curious Cryptos’ Commentary – Strategic Bitcoin Reserves

Glassnode has teamed up with Gemini to produce an analysis of the current state of play regarding Strategic Bitcoin Reserves:

https://get.glassnode.com/2025-crypto-trends-report-2/

This is the graphic I like the best:

Those numbers are going to go in one direction, and one direction only.

The report concludes:

“The establishment of the U.S. Strategic Bitcoin Reserve marks a defining moment in bitcoin’s institutional trajectory. With over 30% of circulating supply held by centralized entities—including exchanges, ETFs, corporations, and sovereign treasuries—the market is undergoing a structural transformation driven by long-term capital and strategic custody.”

…

If you want to see some more detail about which entity is holding BTC, and in what amount, this is another useful resource:

https://bitbo.io/treasuries/

Curious Cryptos’ Commentary – Corporate holdings of BTC

Legitimate concerns have been raised about the risk of a forced selloff of BTC by a corporate which gets into financial difficulties. Even the prospect of a bankruptcy occasioned by BTC has been discussed. These are not concerns to be lightly dismissed, and certainly never ignored, but there are some mitigating factors in our favour.

The very largest holder of BTC – Strategy – is very far removed from being a forced seller, or having bankruptcy forced it upon it because of BTC price action:

https://www.curiouscryptos.com/post/10th-june-2025-blackrock-mstr

The same analysis can be applied to other big buyers of BTC such as MetaPlanet.

There are others who are using part of the cash that flows into the treasury to buy BTC rather than other financial instruments such as short-dated treasury bills. Here, the legitimate concern is whether a sudden need for cash might not be satisfied by the BTC held on balance sheet, but again, there are some very useful mitigating factors.

Firstly, it would be obviously foolish to run the treasury with a BTC holding over say 5% of the reserves. Any company that gets down to its last 5% of reserves is already in a lot of trouble cashflow wise from other business decisions. Holding BTC may or may not help that situation, but it cannot be said to have caused it. Secondly, those BTC holdings are marked-to-market every day, so there are no hidden surprises for management. These companies might become forced sellers, but only because of poor management decisions in their day-to-day business.

The real concern is regarding leveraged buyers – those raising traditional debt, not zero-coupon convertible bonds, nor those issuing equity to buy BTC – whose debt not only causes an annual cashflow drain but also requires principal repayment at a set date. These are the buyers about whom we should worry, for it is easy to imagine a scenario in which bonds fall due, the BTC price is such that the company cannot make that repayment nor raise new debt to retire the old, and it is declared insolvent. At that point, we have a forced seller, perhaps in size. That is not a good situation.

On the upside, I know of no company that is using leverage in that fashion to buy BTC to put on balance sheet. I may be wrong about that. If you do know of any, then please tell me. In the future, perhaps a company goes down this route, though it seems very unlikely, and highly irresponsible to me.

I am not trying to belittle the risks of companies buying BTC to put on balance sheet. Shareholders of those companies are taking a big risk, in the expectation of bigger rewards. Everyone must make their own assessment of how, if at all, such companies fit into their own investment portfolio.

But unless, and until, we see large leveraged buyers, the contagion risk to the broader crypto markets is a tail-end risk for me.