Corporate Bitcoin
Tax boxes add to buying pressure at the moment, but a sharp decline in the price of the world’s cryptocurrency can lead to forced liquidation, Standard Charter Analyst Geoff Kendrick said in a research report on Tuesday.
As many as 61 publicly listed companies have adopted cryptocurrency as a treasury asset, and these companies now own a combined 673,897 bitcoin by the end of May, or 3.2% of Cryptocurrency’s total supply, the report said.
Of course, the large number owes almost everything to Michael Saylor’s Strategy (MSTR), which in itself has a total of 580,955 tokens.
“Based on the 2022 Example on Core Scientific (Corz), we estimate that prices of more than 22% below average purchase prices can lead to liquidation,” wrote Geoff Kendrick, head of digital activation at Standard Chartered.
In the bear market that year, Bitcoin sold mines under significant financial pressure 7,202 Bitcoins in June 2022 at an average price of $ 23,000 to collect about $ 167 million ..
“The forced sale award (forced in the sense that creditors would no longer finance Core Scientific’s business model) was only 22% below production costs,” Kendrick said.
If Bitcoin had to move back below the $ 90,000 level, half of these Bitcoin state boxes would be underwater, he added.
Read more: Bitcoin to see additional $ 330B of corporate school flow in 2029: Bernstein
