Home Alternative Investments Rush for bitcoin could be some time away

Rush for bitcoin could be some time away

by Jonathan Adams
Elon Musk

There is unlikely to be a concerted crypto charge any time soon, say many finance executives and accountants

When Elon Musk’s Tesla became the biggest name to reveal it had invested in bitcoin last month, many experts were swift to call a corporate rush towards the booming cryptocurrency.

Yet there’s unlikely to be a concerted crypto charge any time soon, say many finance executives and accountants unwilling to risk balance sheets and reputations on a highly volatile and unpredictable asset that confounds convention.

When I did my treasury exams, the thing we were told as number one objective is to guarantee security and liquidity of the balance sheet, said Graham Robinson, a partner in international tax and treasury at PwC and adviser to the UK’s Association for Corporate Treasurers.

That is the fundamental problem with bitcoin, if those are the objectives for treasurers, then breaking them could get them in trouble, he said.

Tesla Inc’s $1.5 billion bitcoin bet saw it join business software firm MicroStrategy Inc and Twitter boss Jack Dorsey’s payments company Square Inc in swapping some traditional cash reserves for the digital coin.

Proponents of the cryptocurrency see it as a hedge against inflation at a time of unprecedented government stimulus, a falling dollar and record-low interest rates that make attractive high-yielding assets hard to find.

While the moves have prompted more boardroom discussions though, headaches from bitcoin’s volatility to accounting for it and storing it are likely to preclude a big wave of companies holding large amounts on balance sheets in the short term, according to over a dozen financial officers, board members and accountants interviewed by Reuters.

It will take more than a small handful of disruptive companies investing in bitcoin to impact the narrative in boardrooms, said Raul Fernandez, an entrepreneur and investor who sits on the audit committee of the board of chipmaker Broadcom Inc as well as other companies. Larger global companies, I can’t see those conversations happening right now.



Important
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Related News

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Know more