Company: ABTC
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001193125-25-281390
Chunk: 8

Company: American Bitcoin Corp.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 3
Chunk 8
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Market Price Risk of Bitcoin

The Company holds a significant amount of Bitcoin and intends to accumulate additional Bitcoin; therefore, it is exposed to the impact of market price changes in Bitcoin. 

As of September 30, 2025, the Company held 3,418 Bitcoin, and the fair value of a single Bitcoin was approximately $114,068. Therefore, the fair value of the Company's strategic Bitcoin reserve as of September 30, 2025, was approximately $389.9 million. Declines in the fair market value of Bitcoin will impact the cash value that would be realized if the Company were to sell its Bitcoin for cash, therefore having a negative impact on its liquidity.

Custodian Risk

The Company's Bitcoin is held with third-party custodians, including Anchorage, Bitgo, and Coinbase, that we select based on various factors, including their financial strength, security measures, insurance coverage and industry reputation. Custodian risk refers to the potential loss, theft, or misappropriation of the Company's Bitcoin assets due to operational failures, cybersecurity breaches, or financial difficulties experienced by these third parties. Although the Company periodically monitors the financial health, insurance coverage, and security measures of its custodians, reliance on such third parties inherently exposes the Company to risks that it cannot fully mitigate.

Credit Risk

Credit risk arises from the Company's practice of pledging Bitcoin as collateral in transactions with counterparties. The Company mitigates this risk by engaging with counterparties that it believes possess strong creditworthiness based on their size, credit quality, and reputation, among other factors. During the nine months ended September 30, 2025, the Company has not incurred any material loss from such transactions. However, there remains a risk that a counterparty could default on its obligations to the Company, which might result in a material loss. The Company continually assesses the credit risk associated with its counterparties and, if necessary, recognizes a loss provision or write-down. Credit risk also arises from the Company placing its cash and demand deposits in financial institutions. Although the Company strives to limit its exposure by placing cash and demand deposits with financial institutions with a high credit standing, there can be no assurances that it is able to mitigate its credit risk.

Tariff Risk

Changes in government and economic policies, incentives, or tariffs may also have an impact on equipment that the Company import. While the final scope and application of recently announced changes in U.S trade policy remain uncertain at this time, higher tariffs on imports and subsequent retaliatory tariffs