After surging to record highs earlier, the crypto market dropped over 4% on Thursday following a report from the Sentora platform warning that corporate adoption of Bitcoin as a treasury asset is like playing “balance sheet roulette”.
“Bitcoin’s scarcity and programmability make it an unprecedented corporate asset — but without scalable yield and durable financing, most current adopters are playing a dangerous game of balance sheet roulette,” Sentora’s Head of Lending Patrick Heusser mentioned in the report. The report analyzed 213 organizations holding 1.79 million BTC ($214 billion), noting that 71% (~1.27 million BTC) is on public companies’ balance sheets, and highlighted the risk that buying Bitcoin with borrowed money is a “negative carry trade,” since BTC generates no yield. Bitcoin (BTC) plunged 4.11% to $118,298.546 at 9:25 am ET, while Ethereum (ETH) tumbled 4.68% to sell for $4,528 at the same time.