CoinVoice has learned that Fitch Ratings warns that due to price volatility, structural complexity, and counterparty risk exposure, Bitcoin-backed securities pose a higher market value risk. These instruments rely on Bitcoin as collateral, and their liquidation trigger mechanisms could amplify losses. Past bankruptcies of cryptocurrency lenders and extreme Bitcoin volatility (such as the 49% crash in March 2020) highlight the importance of adopting conservative financing strategies and sound risk management.
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CoinVoice has learned that Fitch Ratings warns that due to price volatility, structural complexity, and counterparty risk exposure, Bitcoin-backed securities pose a higher market value risk. These instruments rely on Bitcoin as collateral, and their liquidation trigger mechanisms could amplify losses. Past bankruptcies of cryptocurrency lenders and extreme Bitcoin volatility (such as the 49% crash in March 2020) highlight the importance of adopting conservative financing strategies and sound risk management.