According to The Block, Franklin Templeton's digital asset analyst has released a report warning that the future of corporate crypto finance strategies is full of uncertainty and depends on several key factors. Although this model can create upward space through premium financing, asset appreciation, and pledge income, a negative feedback loop may trigger a "particularly dangerous" spiral decline.
The report points out that currently, 135 listed companies have adopted the Bitcoin financial strategy, raising funds through tools such as equity and convertible bonds to hold encrypted assets. This model relies on the volatility of encrypted assets to enhance the option value of financial instruments such as convertible bonds, and can form a positive cycle when prices rise. But analysts warn that if the price to book ratio falls below 1, equity financing will turn into a dilution effect, forcing companies to sell assets to protect the market, thereby exacerbating the vicious cycle of currency price decline and investor confidence collapse. The report emphasizes that maintaining the price to book ratio premium, continuous appreciation trading, and the ability to cope with market fluctuations will be the key to the long-term survival of such enterprises. Analysts believe that although the current risks are more complex than those of Terra or Three Arrows Capital, a major pullback or long-term bear market could still trigger a catastrophic chain reaction.
