Why Are More Corporations Considering Adding Crypto Assets to Their Treasury Portfolios?
Cryptocurrencies are increasingly being used by businesses as part of their corporate treasuries. The upward trend begun by large publicly traded corporations in 2020 is continuing.
But, as you'll see, companies like BVNK are assisting the middle market – whether it's midsize to big corporations, family offices, or tech-savvy high-net-worth (HNW) individuals with $100,000 to $500,000 to invest – to accomplish the same thing.
The Beginning of Corporate Crypto Treasuries
MicroStrategy, a business analytics firm, became the first publicly traded corporation to buy bitcoin on Aug. 11, 2020. The corporation now possesses roughly 109,000 bitcoins, accounting for nearly a quarter of its total holdings.
While MicroStrategy and other publicly traded firms such as Tesla and Square, as well as countries such as El Salvador, have "accepted" bitcoin, substantial capital investments in cryptocurrencies are not limited to Fortune 500 companies or developing countries. Many other large corporations are joining in the fun as well.
Did you know that the Ikea Group, which sells self-assembly furniture, also invests in cryptocurrencies? The Association of Corporate Treasurers is as well.
Geely Auto Group, the largest stakeholder in the Volvo car brand, is also getting in on the action, with plans to integrate decentralised applications into vehicles across China in the future, as well as adding cryptocurrency to its treasury.
Corporate Crypto Treasuries: The Present and Future
Seven out of ten institutional investors questioned by Fidelity Digital Assets want to invest in digital assets in the next five years, according to a recent study. The study also indicates that digital assets are now being invested in by 52 percent of corporations polled in Europe, Asia, and the United States. Enterprises will almost certainly follow suit, and will need to maintain digital assets in their reserves if they expect to serve clients using cryptocurrencies on a daily basis.
In a separate research, the European Commission predicts that digital assets can help European businesses cover a €25-€30 billion financing gap.
Family offices are joining in the fun as well. According to Goldman Sachs, 15 percent of global family offices own bitcoin assets. This covers a quarter of all family offices in the Americas.
Only about ten percent of survey respondents in Europe, Africa, and Asia own digital assets, but that percentage is anticipated to skyrocket in the future years.
Overall, 42% of survey respondents claim they are already investing in digital assets, with precious metals coming in second.
Why Is Having Crypto Assets in a Corporate Treasury a Good Idea?
According to the same report, respondents are employing crypto assets, precious metals, and traditional currencies to diversify their investments geographically and safeguard capital from future currency depreciation.
One of the reasons why having crypto assets as part of a company treasury is a good idea is to hedge against depreciation and inflation. Even if large-scale currency debasement does not occur for decades, businesses of all sizes can gain from the first-mover advantage. The crypto asset class is still growing 13 years after bitcoin's creation.
Organizations will benefit not only from the price appreciation of crypto assets, but also from the fact that 40% of crypto-savvy customers spend at least twice as much as a crypto customer who uses a standard credit card.
Transparency, revenue-sharing activities, and money transfers can all take place in real time thanks to crypto assets and the blockchains on which they are built. They provide more capital control and enable businesses to manage the risks associated with digital investments.
With so many practical and financial advantages to introducing cryptocurrencies to corporate treasuries, it's no surprise that 40% of small and midsized businesses accept cryptocurrency as payment.
How Can BVNK Assist Businesses in Creating Crypto Asset Treasuries?
BVNK is a turnkey digital asset banking platform that may assist firms in setting up corporate treasuries and accepting customer payments. One of the main issues facing the mid-market is diversifying global banking services and treasury suppliers. Especially when it comes to making payments to cryptocurrency companies.
The research above focuses on the crypto asset corporate treasury trend, which has already caught the attention of a number of well-known global corporations. As time goes on, more and more firms will embrace the concept of constructing treasuries, and groups like BVNK will play a key role in assisting them in doing so.
