'Attack of the Clones': Coinbase Raises Alarm on Risks With Bitcoin Treasury Model

Coinbase issued a dire warning Thursday to publicly traded companies going all in on Bitcoin: The gains may be addictive now—but if and when the music stops and prices fall, disaster could ensue.

In a report on the crypto market’s outlook for the second half of 2025, Coinbase Head of Research David Duong predicted that the recent trend of American corporations spinning up multibillion dollar Bitcoin treasuries may be bullish in the near future, but poses “systemic risks” to the entire crypto ecosystem in the medium-to-long-term.

In the wake of large publicly traded companies like Strategy and Tesla spending billions of dollars to buy up Bitcoin, over a hundred other such Wall Street-traded firms have followed suit in recent months. A total 126 publicly traded companies currently hold a collective 819,857 BTC, according to BitcoinTreasuries.net—a sum worth over $87 billion at writing.

This dynamic has created a potential “attack of the clones” scenario, Coinbase says, in which the viral trend could soon trigger devastating consequences.

The incentive for publicly traded companies to buy up Bitcoin became too attractive to ignore in December, Coinbase’s Duong said. That month, new accounting rules went into effect permitting such firms to count unrealized crypto gains on their books.

The development happened to coincide with a massive (and still ongoing) upswing for Bitcoin. Thus, in recent months, dozens of publicly traded companies have collectively invested billions of dollars in the world’s top cryptocurrency—as a means to easily pump stock prices.

Even President Donald Trump’s own publicly traded media company raised $2.4 billion last month to seed its own Bitcoin treasury, following the trend that GameStop and many other firms have recently latched onto.

Duong warns, however, that when Bitcoin’s price starts falling, these firms—which have raised cheap money to purchase the cryptocurrency by issuing convertible bonds—will have to begin paying off their investors, and will likely be forced to “sell their crypto holdings, possibly at a loss."

“Thus, the fear is that indiscriminate selling by many entities at once (to service those debts) could lead to market liquidations and a sell-off in crypto more broadly,” Duong wrote.

“If prices start to fall and these entities perceive a narrowing exit, others may rush to sell as well, destabilizing the market well before any actual debt repayment issues emerge,” he continued.

While the analyst anticipates such a calamity would not be as devastating as past crypto crashes, and is “confident about Bitcoin's upward trajectory even in the face of such risks,” he nonetheless categorized the potential damage of such an outcome as “systemic.”

In recent days, analysts have begun ringing similar alarm bells. Last week, Standard Chartered predicted that roughly half of non-crypto publicly traded firms with Bitcoin treasuries would go underwater if the token fell below $90,000.

Last month, Coinbase’s own CEO, Brian Armstrong, said that going all-in on a Bitcoin reserve, similar to Strategy, would have been “too risky” a move in its earlier days.

Edited by Andrew Hayward