What happens when Bitcoin drops?
Trouble surfaced after the summer when Bitcoin began falling, eventually dropping below US$90,000 in November, undermining confidence in companies heavily exposed to it.
“The market quickly started to ask: ‘Are these companies going to run into trouble? Could they go bankrupt?’” said Mr Eric Benoist, a tech and data expert at Natixis bank.
Finance professor Carol Alexander at the University of Sussex told AFP that regulatory uncertainty, cyberattacks and fraud risks are also deepening investor mistrust.
An example is software company Strategy, the largest corporate holder of Bitcoin with more than 671,000 coins, or about 3 per cent of all the Bitcoin that will ever exist.
Over six months, however, its share price more than halved, and its market value briefly dropped below the total value of its Bitcoin holdings.
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- Guavaxf30·12-28 21:17https://www.straitstimes.com/business/companies-markets/how-company-bets-on-bitcoin-can-backfireLikeReport