Franklin Templeton “Corporate Cryptocurrency Financial Strategy, Uncertainty And Risk Are High”
Global asset management company Franklin Templeton has expressed a negative view on public companies' cryptocurrency holding strategies. Recently, as companies including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and other major cryptocurrencies in their balance sheets are increasing, Franklin Templeton warned that this financial strategy may help increase corporate value in the short term but involves structural risks.
According to the report, the strategy has a high correlation with the directionality of the cryptocurrency market and is analyzed to have great uncertainty in that it can cause a ‘vicious cycle’ in case of a price drop. In particular, if the value of cryptocurrencies held by companies plummets, asset sales to defend this become inevitable, and this process can again act as downward pressure on the market.
Franklin Templeton emphasized that “companies incorporating cryptocurrencies as strategic assets are exposed to a different dimension of risk compared to the existing financial system” and “should consider mid-to-long-term financial stability and market shock absorption capabilities rather than short-term profits.”
Amid the spread of cryptocurrency incorporation movements by large companies following recent Bitcoin ETF approval, Franklin Templeton's remark is being accepted as a warning once again reminding of the ‘double-edged sword’ potential of digital assets in corporate financial strategy.