Fitch: The risks of Bitcoin-backed securities are extremely high

Fitch Ratings warns that due to price volatility, structural complexity, and counterparty risk exposure, Bitcoin-backed securities carry a high market value risk, as these instruments rely on Bitcoin as collateral, and their liquidation trigger mechanisms may amplify losses.

The bankruptcies of previous cryptocurrency lending institutions and the extreme volatility of Bitcoin (such as the 49% crash in March 2020) highlight the importance of adopting conservative financing strategies and sound risk management.