tl;dr
Binance founder Changpeng Zhao (CZ) has cautioned companies adopting Bitcoin as a treasury asset to fully understand and manage the risks involved. He emphasized that risk is a spectrum, not binary, and that avoiding risk entirely can be as harmful as taking excessive risks. CZ highlighted the impor...
Binance founder Changpeng Zhao (CZ) has issued a crucial warning to companies considering Bitcoin as a treasury asset, urging them to thoroughly assess and manage the risks involved. He stressed that risk-taking is an essential business component but must be balanced to optimize return on investment. Risk is not binary but exists on a spectrum, and avoiding risk altogether can be as detrimental as embracing excessive risk. CZ also highlighted the necessity for firms to prepare for extreme scenarios—such as Bitcoin losing all value—warning that such events, while extreme, are plausible.
Currently, over 200 companies, including notable names like Trump Media and GameStop, have integrated Bitcoin into their treasuries. This surge stems from Bitcoin’s perceived benefits, including protection against counterparty risk, currency instability, and its capacity to reduce cross-border transaction costs and preserve long-term value. MicroStrategy remains the largest institutional holder, managing over 580,000 BTC, while collectively the top 100 holders control more than 814,000 BTC.
Market observers attribute this trend to factors such as political backing, multinational operational needs, and financial strategy evolution. Companies view Bitcoin as a tool to reduce dependency on third parties, particularly when using self-custody or custodians restricting lending practices. Furthermore, Bitcoin acts as a bridge asset for multinational businesses, easing and economizing cross-border transactions.
During low-interest or inflationary periods, Bitcoin’s capped supply and predictable issuance make it a unique defensive asset compared to fiat currencies, which frequently face debasement risks. This combination of properties explains why corporate Bitcoin treasuries continue to gain popularity as a strategic financial resource.