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Most CFOs Hesitate to Invest in Bitcoin, Finds Study

A Gartner survey finds out that a majority of finance executives are not planning to hold Bitcoin as a corporate asset.

CXOtoday News DeskCXOtoday News Desk
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While tech majors such as Tesla and Twitter have unshakable faith in bitcoin, with some hailing it as the ‘Internet’s currency’ , a majority of CFOs remain hesitant to follow suit.Most of them point to the volatile price of bitcoin, which could have negative effects on their balance sheets, and question whether the practical uses of bitcoin are worth the risk.

The value of Bitcoin more than quadrupled in 2020 and rose further in recent weeks after Tesla CEO Elon Musk disclosed a $1.5 billion investment in bitcoin and Twitter mulled paying employees or vendors using the cryptocurrency.

In a recent survey of 77 global CFOs by Gartner, 84% of respondents said they did not plan to ever hold bitcoin as a corporate asset, according to Gartner, Inc

“Eighty-four percent of the respondents said that bitcoin’s volatility posed a financial risk,” said Alexander Bant, chief of research in the Gartner Finance practice. “It would be extremely difficult to mitigate the kind of price swings seen in the cryptocurrency in the last five years.”

Volatility was the top concern by a large margin, but other big issues that respondents had were board risk aversion, slow adoption as an accepted form of payment, regulatory concerns, and a lack of expertise in cryptocurrencies.

Top 3 Concerns for an Organization to Hold Bitcoin
“There are a lot of unresolved issues when it comes to the use of bitcoin as a corporate asset,” said Bant. “It’s unlikely that adoption will increase rapidly until we get more clarity on these challenges.”Seventy-one percent of respondents said one of the top things they’d like to know is what others are actually doing with bitcoin. Sixty-eight percent want to hear more from regulators about bitcoin and better understand the risks involved with holding it.“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,” he said.Even the 16% of respondents willing to adopt the cryptocurrency as part of their organization’s financial strategy appeared in no rush. Five percent of respondents indicated they would begin to hold bitcoin in 2021, 1% said they’d hold bitcoin at some point in 2022-2023, and the remaining 9% who indicated they would begin holding bitcoin said it would be 2024 or later.However, driven by the developments such as MasterCard, PayPal and Apple starting to accept payments in bitcoin, industry professionals may show interest on the digital asset. For example, US-based enterprise software company MicroStrategy said this week that it will buy additional bitcoin. The company is already holding around 72,000 units of bitcoin worth around $3.6 billion. But analysts consider these developments a deviation from the norm. And at present most finance executives are not planning to hold Bitcoin as a corporate asset.. willing to adopt the cryptocurrency as part of their organization’s financial strategy appeared in no rush.
Tags :BitcoinCFOsCryptocurrencyElon MuskGartnerhpb
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