Tesla announced in February that it had bought $US1.5 billion of bitcoin

Tesla announced in February that it had bought $US1.5 billion of bitcoin

  • A survey showed that 84% of company finance executives said they will never hold bitcoin.
  • The bitcoin price jumped to an all-time high of above $US51,700 on Wednesday.
  • Chief financial officers remain concerned about the cryptocurrency’s volatility.
  • Visit the Business section of Insider for more stories.

Corporate finance executives do not plan to copy Tesla and invest in bitcoin, a new survey has shown, with 84% saying they did not ever foresee holding the world’s biggest cryptocurrency.

Only 5% of finance executives said they planned to buy bitcoin this year, according to a Gartner survey which polled 77 finance executives, including 50 chief financial officers. The digital currency soared to a record high of above $US51,700 on Wednesday, before slipping back.

The survey showed that a large majority of executives said one of their top three concerns over bitcoin was its volatility. Risk aversion from the company boards and bitcoin’s slow adoption as a form of payment were CFOs’ other main concerns.

Yet 16% of respondents said they would be willing to adopt bitcoin at some point in the future. Just under 10% said they would do so from 2024 onwards.

“There are a lot of unresolved issues when it comes to the use of bitcoin as a corporate asset,” said Alexander Bant, chief of research in the Gartner Finance practice. “It’s unlikely that adoption will increase rapidly until we get more clarity on these challenges.”

Tesla triggered a sharp rally in the price of bitcoin after it revealed earlier this month that it had bought $US1.5 billion of the cryptocurrency in January.

Business intelligence company MicroStrategy said on Tuesday that it planned to sell $US600 million in convertible bonds to double down on its hugely successful bet on bitcoin.

Yet Gartner’s research showed that CFOs have a range of concerns about bitcoin, including regulatory worries and cyber risks. Executives in charge of a company’s finances usually hold assets deemed safe, like money-market funds or bank deposits.

However, Bant said: “It’s important to remember this is a nascent phenomenon in the long timeline of corporate assets.”

“Finance leaders who are tasked with ensuring financial stability are not prone to making speculative leaps into unknown territory.”

Source