Fitch Ratings Warning: Why Are Bitcoin-Backed Securities Classified as "High Risk"?

Fitch Ratings, one of the three major credit rating agencies in the United States, issued a clear risk warning in its latest assessment report regarding securities backed by Bitcoin. The report points out that financial instruments relying on Bitcoin or Bitcoin-related assets as collateral carry higher market value risks, and their credit characteristics meet the criteria for speculative-grade ratings.

Fitch specifically emphasizes that the sharp fluctuations in Bitcoin prices may cause collateral values to decline rapidly, triggering chain reactions such as margin calls and forced liquidations, thereby increasing the loss risks for lenders and investors.

Core of the Warning: Fitch’s Concerns and Analysis

Fitch released a specialized assessment of Bitcoin-backed securities this week. The typical structure of these financial products involves packaging Bitcoin or Bitcoin-related assets into a collateral pool, then issuing debt instruments based on this pool. As one of the most influential credit rating agencies globally, Fitch’s evaluation directly impacts how banks, asset management firms, and other institutional investors perceive and price the risks of emerging financial products.

Fitch’s report clearly states that the high volatility of Bitcoin prices is the primary risk source. When Bitcoin prices drop significantly, the collateral coverage ratio (the ratio of Bitcoin collateral value to the amount of debt issued) may quickly fall below preset thresholds, triggering a series of enforcement measures, ultimately leading to actual losses.

Risk Focus: Price Volatility and Structural Fragility

Unlike traditional asset-backed securities, the risks of Bitcoin-backed securities are concentrated in several interconnected fragile links.

First, Bitcoin prices are highly volatile. For example, in March 2020, Bitcoin plummeted by 49% in a single month. Such extreme market conditions can rapidly erode collateral value.

Second, the collateral coverage ratio is a critical weakness of these products. Once Bitcoin prices decline, causing the coverage ratio to fall below critical levels, margin calls and forced liquidations will be triggered, creating a vicious cycle of “price decline—forced sale—further decline.” Fitch also specifically mentions the collapse of several crypto lending institutions such as BlockFi and Celsius during 2022-2023, viewing these as warning cases of collateralized financing models collapsing rapidly under market pressure.

Market Context: Evolution of Bitcoin’s Role and Divergence Among Institutions

The risk warning regarding Bitcoin-backed securities comes at a time when Bitcoin’s role is subtly changing. Notably, there are significant differences in how various financial institutions perceive Bitcoin’s risks.

Asset management giant Fidelity last year suggested that Bitcoin is undergoing “de-risking,” gradually moving beyond high-risk assets. Fidelity pointed out that the correlation between Bitcoin and the 10-year US Treasury yield has fallen to its lowest level in history, with its price movements becoming increasingly independent. This divergence reflects the complex positioning of crypto assets within traditional finance: on one hand, some institutions view Bitcoin as a configurable “strategic reserve” asset; on the other hand, its structural risks as collateral for debt still attract strict scrutiny from traditional rating agencies.

Macro Impact: How Ratings Shape Market Attitudes

Fitch’s warning could have a substantial impact on the Bitcoin securitization market. A speculative-grade rating implies that these products may not be suitable for conservative institutional investors or may require higher risk premiums. Such assessments influence institutional investors’ decision-making processes, especially those constrained by internal risk controls or regulatory requirements.

Meanwhile, the global trend of asset tokenization continues. Some analysts expect that by the second half of 2026, tokenized stocks may begin trading alongside traditional stocks on exchanges like Nasdaq in the United States. Against this backdrop, Fitch’s warning may prompt market participants to adopt more cautious approaches in designing crypto-based financial products, seeking a balance between innovation and risk management.

Market Status: Bitcoin Price and Investment Perspective

As of January 13, 2026, data from Gate shows Bitcoin’s price remains around $91,000, with the overall market exhibiting a sideways pattern.

From a market structure perspective, the current crypto space displays diverse development trends. On one hand, mainstream assets like Bitcoin and Ethereum remain relatively stable; on the other hand, niche sectors such as Meme coins experience extreme volatility, highlighting significant differences in risk characteristics across market segments. Notably, the performance of spot Bitcoin ETFs differs fundamentally from Bitcoin-backed securities. Fitch’s report specifically notes that spot Bitcoin ETFs are designed as equity instruments rather than credit products, and their performance is not directly linked to contractual repayment supported by collateral.

In fact, Fitch believes that increased ETF acceptance could help expand Bitcoin’s investor base, and a broader holder structure might even mitigate Bitcoin’s price volatility during future market stress periods.

Investment Response: Risk Identification and Strategy Adjustment

In light of Fitch’s risk warning, market participants can consider examining Bitcoin-related financial products from multiple dimensions. For Bitcoin-backed securities, investors should pay particular attention to collateral coverage ratio design, price trigger mechanisms, and the issuer’s risk management capabilities. Unlike traditional assets, the crypto market operates 24/7 without daily price limits, meaning risks can be rapidly released at any time.

Investors need to distinguish the risk characteristics of different Bitcoin-related products: Bitcoin itself as an asset, spot Bitcoin ETFs as investment tools, and Bitcoin-backed securities as collateralized financing products—all have different sources and transmission mechanisms of risk.

Market data shows that although Bitcoin prices have retreated from historical highs, they still remain at relatively high levels. In 2026, Bitcoin’s price and the overall performance of the crypto market will largely depend on the monetary policy pace of major global economies.

When Bitcoin prices fall below a critical threshold, collateral backing Bitcoin-backed securities worth hundreds of millions of dollars could be forcibly liquidated within hours. The collapses of crypto lenders Celsius and BlockFi have already demonstrated this domino effect. Fitch’s warning indicates that the “financialization” process in the crypto world still faces strict scrutiny from traditional finance. Products attempting to package Bitcoin as low-risk debt instruments must endure the harsh test of market price volatility. On the Gate market page, Bitcoin’s price continues to fluctuate around $91,000. Behind this seemingly stable figure, a silent contest is unfolding regarding risk pricing, financial innovation, and traditional prudence principles.