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Crypto treasury risks may mirror 2008’s CDO crisis as firms leverage into Bitcoin and altcoins, warns Milo CEO.
Author: Akshat Thakur
August 28, 2025, Crypto treasury risks are drawing comparisons to the 2008 financial crisis, as executives warn that corporate strategies for holding digital assets may introduce systemic vulnerabilities.
Rupena argued that crypto treasury firms take Bitcoin and other bearer assets with no counterparty risk and “engineer” them into complex products. These structures introduce risks tied to corporate governance, cybersecurity, and cash-flow sustainability.
He compared the practice to how mortgage-backed securities once turned relatively safe home loans into risky CDOs: “People take what is a sound product and start engineering it, leaving investors unsure of the exposure they’re really getting.”
While Rupena does not believe treasuries will trigger the next bear market, he warned that crypto treasury risks could exacerbate volatility. Overleveraged companies may face forced liquidations, creating market contagion and pressuring crypto prices.
Several analysts share this view, pointing out that forced selling from treasury firms could depress digital asset prices during downturns.
Currently, 178 public companies hold Bitcoin on their balance sheets. But recent months have seen firms move beyond BTC into altcoin strategies. In July and August, companies announced treasuries in Toncoin, XRP, Solana, and Dogecoin, expanding beyond the “Bitcoin standard” championed by MicroStrategy’s Michael Saylor.
The diversification has led to mixed market reactions. Shares of beverage firm Safety Shot fell 50% after it adopted BONK memecoin as its reserve asset. Meanwhile, Bitcoin treasury-focused firms also saw stock price declines in the second half of 2025 as the strategy became crowded.
The rise of crypto treasury risks highlights the tension between innovation and financial engineering. In traditional finance, structured products like CDOs created systemic vulnerabilities. Crypto firms now face a similar dilemma turning simple, bearer assets into engineered products that add complexity and potential instability.
For companies, crypto treasuries offer diversification and balance-sheet upside. But without safeguards, they may amplify systemic risks across both equity and crypto markets.
The warning from Milo’s CEO underscores that crypto treasury risks could play a role similar to CDOs during the 2008 crisis. While not expected to cause the next downturn alone, overleveraged treasuries may magnify volatility, raising questions about whether companies are strengthening or weakening market resilience by engineering digital asset holdings.
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