Fitch Ratings reports that Bitcoin market liquidity is becoming more resilient to sector-specific shocks as the market matures. The agency suggests that improved liquidity may reduce the impact of contagion from crypto-native failures, potentially easing the process of liquidating collateral during market stress.
Despite this outlook, Fitch maintains a cautious stance on Bitcoin-backed securities. In a report dated January 12, 2026, the agency classified these financial products as high-risk, speculative-grade assets. This assessment reflects concerns over Bitcoin’s historical price volatility, such as the 49 percent intraday drop observed in March 2020.
The agency highlighted the risks associated with structured products using special purpose vehicles, which often feature automated liquidation triggers. Fitch pointed to the bankruptcies of lenders BlockFi and Celsius during 2022–2023 as examples of failures resulting from inadequate margining practices and rapid collateral devaluation.
Market data shows significant growth in the sector, with Bitcoin’s market capitalization reaching approximately $2,5 trillion by October 2025. The crypto-collateralized lending market peaked at around $74 billion in the third quarter of 2025.
Fitch noted that spot Bitcoin ETFs could contribute to market stability by diversifying the holder base. However, the agency emphasized that inherent price volatility remains a primary risk factor, which may continue to limit institutional exposure from conservative investors like pension funds and insurers.
