Franklin Templeton Breaks Down How Crypto Treasuries Could Crack

What happens when corporations adopt Bitcoin as a treasury asset – not just a trade? That question has shifted from theory to market reality. According to Franklin Templeton Digital Assets, a growing cohort of public companies is raising capital through equity, preferred shares, and convertible notes to buy crypto-primarily BTC, ETH, and SOL-at institutional scale. This treasury strategy, first popularized by Strategy (formerly MicroStrategy), has gathered over $17 billion in capital since early 2024 and now includes at least 38 public companies worldwide.

Franklin Templeton isn’t a casual observer. With a decades-long legacy in asset management and a dedicated digital assets division, their reports carry weight among institutional players and regulators. In their July 2025 playbook, they argue that this model reflects a “new phase of institutional crypto adoption” – but also embeds fragilities that are easy to miss. Their analysis covers both how capital is raised and deployed and what could happen when market conditions turn.

And the scale is no longer fringe. Strategy alone now holds over 592,000 BTC – more than 2.8% of Bitcoin's total supply. Metaplanet, Twenty One, and Upexi are chasing similar ambitions across BTC, ETH, and SOL. These firms aren't just investing-they’re restructuring how capital formation works. But the same feedback loops that make the model lucrative in a bull market could make it structurally dangerous in a downturn.

Bitcoin Becomes the Corporate Benchmark as Treasury Models Go All In

Franklin Templeton highlights a structural pivot: public companies are increasingly treating Bitcoin not as a hedge, but as a core balance sheet asset. This shift is being executed through complex capital-raising tools-at-the-market equity programs, convertible notes, and private placements – all aimed at acquiring BTC. The report frames this as a strategic reallocation of corporate capital, one that treats crypto not as speculative exposure but as a monetary foundation.

As of 2025, 38 public companies hold over 309,000 BTC-an increase of 196% year-over-year. Strategy alone now controls more than 2.8% of total Bitcoin supply, with plans to raise an additional $84 billion,

the analysts noted. 

This is more than bullish behavior-it’s a redrawing of treasury logic. From Japan’s Metaplanet to Nasdaq-listed Twenty One, firms are replacing traditional uses of capital with crypto accumulation. Bitcoin’s liquidity, regulatory profile, and market narrative make it the lead candidate for this transformation. Franklin Templeton positions this as both a signal and a catalyst: when treasuries adopt BTC as infrastructure, the asset ceases to be fringe – it becomes institutional architecture.

When the Premium Breaks: Crypto Treasuries and the Risk of Self-Destruct

But Franklin Templeton doesn’t stop at enthusiasm. The report lays out the model’s core vulnerability: its dependence on a market-to-NAV premium. When that premium holds, equity issuance is accretive, and firms can keep buying. But if share prices fall below the value of underlying crypto assets, the engine seizes. Capital dries up. Worse – some firms may be forced to sell crypto to defend their equity price, triggering further losses.

If the market-to-NAV ratio falls below 1, companies may struggle to raise capital without harming existing shareholders. This breaks the positive feedback loop-and in a downturn, can trigger forced sales, collapsing both token prices and investor confidence.

Franklin calls this dynamic a “particularly dangerous scenario.” It’s not just dilution – it’s contagion. A few large treasury – liquidations could accelerate a downward spiral, eroding both crypto prices and corporate solvency. What began as a financial innovation became a fragile reflex system. And unlike earlier cycles, this version is institutional-leveraged, visible, and potentially systemic.

The corporate crypto treasury model is no longer a fringe experiment. It is scaling fast, reshaping how capital is deployed and priced. But the same mechanics that fuel rapid growth can just as easily trigger collapse. For investors and firms alike, the challenge isn’t just how to play the upside – it’s how to survive the snapback.