Soaring crypto hoarding by public companies hints at exaggerated concerns over bubble bursting: Presto researcher

The recent surge in the number of publicly traded companies hoarding crypto assets for their strategic reserves has hinted at exaggerated concerns over bubble bursting, The Block reported, citing a report by Presto Head of Research Peter Chung. Chung noted that the rapid rise of crypto fund managers has raised concerns that if the market turns into a bear market, their leveraged positions could spark a new round of forced liquidations. However, Chung considers this risk more controllable compared to those advancing past crypto cycle collapses, such as the Terra ecosystem and Three Arrows Capital (3AC). According to the report, there are currently 228 companies that have adopted a crypto hoarding strategy, including Metaplanet, GameStop and Trump Media. These firms have changed their corporate structure to acquire crypto assets. Notably, these companies rarely use crypto as collateral for loans, which indicates that the risk of systemic liquidation would be lower than that during the 2021 market crash. Despite this, firms could offload their crypto holdings to meet urgent cash needs in the event of a liquidity crisis, the report added.