Investment giant Franklin Templeton has issued a serious warning regarding Bitcoin (BTC)!

In recent months, institutional Bitcoin (BTC) adoption is increasing rapidly. At this point, many companies are adopting Bitcoin treasury strategies while a warning came from the American asset management giant.

According to The Block, Franklin Templeton, one of the leading asset management companies in the US, warned about the risks associated with institutional Bitcoin treasury strategies.

Franklin Templeton analysts stated that the future of institutional BTC and crypto treasury strategies is uncertain and depends on various critical factors.

"Inspired by Michael Saylor’s strategy, this speculative approach, which was formerly known as MicroStrategy, is rapidly gaining momentum from the Bitcoin move. It has not been limited to just Bitcoin.

Bitcoin, Ethereum, Solana, and XRP are becoming subjects of corporate treasury strategies, while 135 publicly traded companies are accumulating only BTC.

While adopting the Strategy and Metaplanet and Twenty One BTC strategy, SharpLink ETH, Upexi, and Sol Strategies implement the SOL strategy. However, there are risks associated with this.

At this point, Franklin Templeton analysts stated that if the market-NAV ratio falls below 1, it brings a series of risks.

According to analysts, if this ratio falls below 1, new stock issuances become dilutive and companies may struggle to raise additional capital without harming existing shareholders, potentially halting capital formation.

Analysts stated that, worse still, if cryptocurrency prices fall, companies will be forced to sell their assets to cover crypto losses and protect stock prices, which will further drive down crypto prices.

Analysts also noted that the institutional Bitcoin and crypto treasury model would be adopted more widely, but in the event of a significant downturn or prolonged bear market, these companies could become quite risky investments.

“If Bitcoin and cryptocurrency prices fall, companies will sell their assets to protect their stock prices. This could undermine the value of cryptocurrencies and investor confidence, leading to a negative vicious cycle.”