Corporate Crypto Treasuries Could Worsen Price Crashes: Franklin Templeton
The growing wave of corporate crypto treasuries could amplify market downturns if prices fall sharply, analysts at Franklin Templeton Digital Assets warned in a new report.
Key Takeaways:
- Franklin Templeton warns corporate crypto treasuries could deepen price crashes if markets turn bearish.
- Over 130 public firms have adopted Bitcoin reserves, raising billions through premium-priced equity and debt.
- A falling market-to-NAV ratio risks triggering forced sales, creating a self-reinforcing downward spiral.
While the strategy has drawn praise for fueling institutional adoption and boosting company valuations, the firm cautioned that the model’s inherent risks could trigger a destructive feedback loop in bearish conditions.
Publicly traded companies have been aggressively raising capital through equity, convertible notes, and other instruments to load up on Bitcoin, Ethereum, and Solana for their balance sheets.
Data from Bitcoin Treasuries shows 135 listed firms have deployed this playbook in BTC alone, with leaders including Strategy, Metaplanet, Twenty One, SharpLink, Upexi, and Sol Strategies.
Inspired by Michael Saylor’s Strategy, firms have raised billions since early 2024 by issuing shares at premiums to net asset value (NAV) and capitalizing on crypto volatility.
Franklin Templeton analysts highlighted how the upsides of this approach include the ability to raise capital above NAV, making share issuance accretive even amid price swings.
Additionally, for Proof-of-Stake assets like Ethereum and Solana, staking yields can add revenue streams, enhancing company growth when crypto prices rise.
Rising markets can further attract investors, fueling a positive feedback loop.
The Strategy Treasury Playbook pic.twitter.com/YXXdZmtlIm
— Franklin Templeton Digital Assets (@FTDA_US) July 2, 2025
However, the report flagged a significant downside: if the market-to-NAV ratio slips below 1, equity issuance becomes dilutive, undermining investor confidence and stalling capital inflows.
Worse, if crypto prices fall sharply, companies might feel pressured to sell holdings to support their stock price, sending crypto prices even lower and deepening investor fear.
Such a negative feedback loop could turn a price dip into a self-reinforcing crash.
“The corporate crypto treasury model represents a new phase of institutional crypto adoption, but it is not without its risks,” Franklin Templeton wrote.
Maintaining a premium to NAV and managing market volatility will be essential to avoid dangerous spirals.
More Analysts Voice Concern Over Bitcoin Treasuries
The warning echoes recent comments from Matthew Sigel, head of digital asset research at VanEck, who has voiced concerns over the Bitcoin treasury strategies adopted by some publicly traded firms.
Sigel singled out the use of at-the-market (ATM) share issuance programs, arguing that these can become dilutive if a company’s stock price nears its Bitcoin net asset value (NAV).
To protect investors, he suggested suspending ATM programs if shares trade below 0.95 times NAV for more than 10 consecutive days.
Meanwhile, New York law firm Pomerantz LLP has filed a class action lawsuit against Michael Saylor’s Strategy, accusing the Bitcoin-focused firm of misleading investors about the profitability and risks of its crypto investment strategy.
According to Pomerantz, Strategy overstated the benefits of its Bitcoin treasury strategy and downplayed the volatility and risks inherent to large-scale Bitcoin holdings.
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