Treasury Management Firm Says CFOs Avoid Risk, Bitcoin Won’t Become Corporate Vehicle

2021-5-4 03:56

If you need reassurance on just how early you’re to Bitcoin, head to Fortune.com. They interviewed the managing director of Treasury Partners, Jerry Klein, to find out if corporations are thinking about Bitcoin as a store of value. Short answer, “Not one of our clients has expressed interest in Bitcoin.” Good to know. But let’s explore further.

Related Reading | Stone Ridge’s 10k Bitcoin Bet Shows Changing Sentiment of Corporate America

The article begins with alliteration and dishonesty:

“The lead cryptocurrency so far offers practically no practical uses.”

Is the implication here that, for example, instantaneous wealth transfer is not practical enough? We consulted the linked article to find out exactly what the author meant. It starts with:

“In reality, Bitcoin has flopped as a vehicle for buying things, and it failed in its first big test as a safe harbor during the past year’s stock market crash.”

Oh yeah? Let’s ask the people with strong hands that held on to their Bitcoin until today. Are they not satisfied with Bitcoin’s performance? There’s turbulence, but the harbor is safe. And about the other point. nobody wants to be the next person who pays 10.000 BTC for two pizzas. Bitcoin is and will be in price discovery phase for the foreseeable future. Buying things with it is not a priority.

BTC price chart for the last year on KuCoin | Source: BTC/USDT on TradingView.com But let’s get back to corporate cash

According to Klein, his client’s portfolios usually consist of three kinds of investments: government bonds, money-market funds, and corporate stocks. Klein claims that their priorities are safety and liquidity, and that risk is out of the question. Furthermore, the article continues, “companies want to avoid owning assets that risk even the slightest decline in value.” 

Oh yeah? Isn’t Fiat currency in the United States devaluing at a 15% annual rate? Doesn’t that pose a risk of its own? To drive the point home, let’s quote the pioneer of displaying Bitcoin in the company’s balance sheet. MicroStrategy’s CEO Michael Saylor recently told Time magazine: 

“If you’re going to make a rational investment decision today, whether you’re a real estate investor, a stock investor, a bond investor, or just a wage earner or you’re a treasurer, you have to estimate the rate of monetary expansion for the next eight years. We know there’s a commitment to run deficits, and we know this commitment to stimulus.”

That means the US government is printing money like there’s no tomorrow. And will be for the foreseeable future. 

Related Reading | This is why all companies should buy Bitcoin, says Square’s CFO

You’re early to Bitcoin

Among the crypto community, there is a fear that the arrival of MicroStrategy, Square, and Tesla means that it’s corporations time. That the head-start that Bitcoin gave to the little people is over. Fortune.com’s attitude while handling the subject suggests that the crypto community might be wrong. Big institutions have no idea what’s going on. You probably have more time to stack those Sats. 

And that is a good thing.

Featured Image by Josh Hild on Unsplash - Charts by: TradingView

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