VanEck warns: Bitcoin investments could ruin companies!

VanEck warns: Bitcoin investments could ruin companies!

The current hype about Bitcoin as a reserve currency in corporate balance sheets is constantly growing. Loud The shareholder This development is worrying for asset manager VanEck, whose head of digital asset research, Matthew Sigel, warns of possible “capital destruction”. Companies that invest heavily in Bitcoin face increasing risks, especially if they issue new shares or take on debt to invest in the cryptocurrency.

According to Sigel, the sustainability of this model depends heavily on the share price of the respective company. If the price falls to or close to the net asset value (NAV), this may result in a dilution of the shares of existing shareholders. Such a transition from value-enhancing to dilutive capital raising could have fatal consequences.

Volatility and risks in the blockchain sector

Bitcoin is increasingly being used as a treasury asset. However, many companies ignore the associated risks. Behavioral economics studies show that managers often tend to overestimate themselves and herd behavior. This often results in companies not selling poorly performing Bitcoin assets, further increasing their losses.

Market development and forecasts

Coincourier reported.

While Bitcoin Group SE reported an increase in sales from 7.8 million euros to 9.4 million euros and its EBITDA climbed from -1.8 million euros to +1.8 million euros, the experts warn against thinking utopianly. Regulatory uncertainties caused by MiCA and technological risks caused by quantum computers could have a negative impact on the market.

In summary, Bitcoin remains the central basic investment with over 60% market dominance. The majority of Bitcoins in circulation, 94.5%, are profitable, while in the cryptocurrency Cardano only 46.5% of coins generate profits. Despite high dynamism and interest, market developments show considerable uncertainty and risks.