In the wake of several firms breaking into the crypto industry, a recent survey carried out by Gartner has revealed that many companies are not considering crypto investment in 2021.
The survey revealed that only 5 percent of finance executives are willing to hold Bitcoin as a corporate asset in 2021. 77 firm executives where respondents in this survey as most skeptics justified their decision with BTC’s volatility.
Corporate investors in the crypto space
Recently, electric car maker Tesla shocked the world after announcing that they had purchased $1.5 billion in Bitcoin. Tesla’s entry into BTC has led to an immediate surge in Bitcoin price and other altcoins as several potential corporate investors are giving their opinion why or why not Bitcoin investment is not an option for them.
With the result of Gartner survey, it is safe to conclude that most companies have a little-to-no intention of putting the primary cryptocurrency on their balance sheets.
Similarly, executives of firms like Microsoft, Uber, Adyen among others have said they are not ready to add Bitcoin to their balance sheet. Uber CEO, Dara Khosrowshahi particularly said his firm had quickly dismissed the idea of having anything to do with Bitcoin saying they are not in the speculation business.
"It was a conversation that happened that has been quickly dismissed. We're going to keep our cash safe. We're not in the speculation business," says @dkhos on whether he's considering adding #bitcoin to $UBER's balance sheet. pic.twitter.com/fCEy95rKEb
— Squawk Box (@SquawkCNBC) February 11, 2021
Adyen CEO, Pieter van der Does, on the other hand, said he was concerned about Bitcoin being used as payment owing to its volatility.
Why firms are not ready for Bitcoin investment
Outside excuses Uber, Microsoft and Adyen CEO gave on why they would not buy BTC, Gartner-compiled survey highlighted several main reasons firms executives would not invest in Bitcoin.
Naturally, Bitcoin’s infamous volatility occupied the first place, as it raises the risks for investors. “Eighty-four percent of the respondents said that bitcoin’s volatility posed a financial risk. It would be extremely difficult to mitigate the kind of price swings seen in the cryptocurrency in the last five years.” – noted Gartner Finance’s Chief of Research, Alexander Bant.
Bant explained that the cryptocurrency is still very early in its adoption and development cycle, which makes traditional investors warier of allocating any funds in it. He also notes that the surge in BTC price drawn the attention of these executives and if it continues to improve, firms could re-consider their positions in future.