Coinbase has raised financial health red flags for publicly traded crypto vehicles, warning that debt-related obligations could soon force some companies to liquidate crypto holdings.
In a Coinbase report, the company highlighted concerns about risk refinancing and loan-to-value ratios, but said most large companies still have options to avoid liquidation.
“Many of these PTCVs have issued convertible bonds to raise cheap funds to purchase a variety of crypto assets, creating a risk of forced sales pressure,” the report read.
The report says that if crypto prices fall and companies are unable to refinance their debts, they will be forced to sell crypto stocks, which could lead to a wider market liquidation.
Coinbase emphasized that while the loan-value ratio is manageable, refinance ability is important, and the capital structure of private transport capital vehicles is contradictory and difficult to monitor.
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Optimism due to corporate accumulation
Despite these risks, Coinbase remains cautiously optimistic, especially as the accumulation of cryptocurrency companies continues. The company believes there will be room for growth in the second half of 2025. This is because more traditional companies are interested in balance sheet crypto strategies.
Regulatory-wise, Coinbase expects 2H25 to be transformative for the US digital asset industry. Leaving away from “enforcement restrictions” under previous administrations created new legal momentum.
The stable act of genius in the Senate was signed by President Trump before the August 4 Congress break and was able to be settled into a single bill. These invoices introduce consumer protection, preliminary rules, and AML compliance requirements for Stablecoin issuers.
Coinbase has also flagged the potential impact of the digital asset market's clear actions aimed at defining the regulatory role of the SEC and CFTC. If passed, the bill could establish a dual framework for distinguishing between “digital goods” and “investment contract assets.”
Meanwhile, SEC reviews around 80 ETF applications, including multi-asset index funds, staking-enabled products, and single-name Altcoin ETFs. There are expected decisions on some proposals between July and October.
Coinbase concluded that while the risk of forced sales and yields persists, Bitcoin (BTC) remains well positioned and that only Altcoin selected based on a project-specific basis could outperform.
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