More and more companies are adding cryptocurrencies to their corporate coffers. The trend started by large publicly traded companies in 2020 is rising.
But, as you’ll find out in a moment, companies like BVNK are helping midsize businesses do the same – be they midsize to large corporations, family offices, or tech-savvy, high-net-worth (HNW) individuals operating on $ 100,000- $ 500,000 US dollars to invest.
The beginning of corporate crypto treasuries
On August 11, 2020, the business intelligence company MicroStrategy became the first publicly traded company to buy Bitcoin. Today the company owns nearly 109,000 bitcoins, which is 75% of the reserves on its balance sheet.
While MicroStrategy and other public companies like Tesla and Square and countries like El Salvador have “adopted” Bitcoin, large capital investments in cryptocurrency aren’t just limited to Fortune 500 companies and developing countries. Many other corporate-level companies are also involved.
Did you know, for example, that the Ikea Group, which makes furniture to build yourself, also invests in cryptocurrencies? Likewise the Association of Corporate Treasurers.
The Geely Auto Group, the largest shareholder in the automotive brand Volvo, is also getting involved with the vision of integrating decentralized applications in vehicles across China in the future and at the same time including crypto in their finances.
The present and future of corporate crypto treasuries
In a recent study, Fidelity Digital Assets found that seven out of ten institutional investors surveyed plan to invest in digital assets in the next five years. The study also confirms that 52% of the companies surveyed in Europe, Asia and the US are currently investing in digital assets. Companies will undoubtedly follow suit and therefore need to hold digital assets in their reserves if they want to serve their customers with cryptocurrency on a daily basis.
In another study, the European Commission estimates that corporate-level companies on the continent can fill a financing gap of 25-30 billion euros with digital assets.
Family offices are also involved. Goldman Sachs estimates that 15% of family offices around the world own cryptocurrencies. This includes 25% of family offices in America.
Just under 10% of respondents in Europe, Africa and Asia own digital assets, but these numbers are expected to grow rapidly in the years to come.
Overall, 42% of respondents said they are already investing in digital assets, and investing in precious metals comes in second.
Why having crypto assets in a corporate coffers is a good idea
The same study referenced above suggests that respondents use crypto assets, precious metals, and traditional currencies to geographically diversify investments and protect capital from possible future currency devaluation.
Hedge against devaluation and inflation is one of the reasons it is a good idea to have crypto assets as part of a company’s coffers. Even if there is no massive currency devaluation for decades, companies of all sizes can still benefit from a first mover advantage. Even 13 years after Bitcoin was introduced, the crypto asset class is still maturing.
Not only do companies benefit from the rise in the price of the crypto assets themselves, but they also benefit from the fact that 40% of crypto-customers spend at least twice the amount that a crypto customer spends on a conventional credit card.
Crypto assets and the blockchains they live on also enable transparency, revenue sharing activities and real-time money transfers. They provide more control over capital and allow companies to manage the risks associated with digital investments as well.
With so many practical and financial benefits associated with adding cryptocurrencies to corporate treasures, it’s easy to see why 40% of small and medium-sized businesses are already accepting cryptocurrencies as a means of payment.
How BVNK can help companies build crypto asset treasuries
BVNK is a turnkey, digital asset banking platform that can help businesses build corporate coffers and take payments from customers. The diversification of global banking services and treasury providers is one of the greatest challenges for medium-sized businesses. Especially when it comes to payments to crypto companies.
The above research highlights the trend towards crypto asset corporate treasury which is already taking many recognizable global brands by storm. Over time, more and more companies will jump up with the idea of building treasury – and organizations like BVNK will go a long way in helping them with this.