Tesla owns 43200 bitcoins, with an existing value of around $1. 52 billion, according to bitcointreasuries. org, making the electric vehicle maker the largest bitcoin owner of the moment following the generation of corporate MicroStrategy.
The cryptocurrency market has been scared in recent weeks due to a combination of Elon Musk postponing bitcoin payments, with China banning money establishments from maintaining crypto practices and japan’s central bank governor warned about its volatility.
Tesla’s announcement in February that it had invested $1. 5 billion in the virtual asset in the first place excited investors, but bitcoin’s recent volatility highlights the dangers for shareholders.
Risk to the duty of investors
“Companies that have a large portion of their cash in bitcoins are simply violating their fiduciary duties with shareholders. If an investor needs to disclose to bitcoin, he will have to buy bitcoins. The company’s cash will have to be used to finance the expansion and/or return. capital to shareholders. How can you plan to fund those projects if your “cash” (bitcoin assets) fluctuates by up to 10% in a day?- Marc Lichtenfeld, chief revenue strategist at the Oxford Club
“Although some investment methods have a small percentage (2% to 5%) of the overall portfolio for investment purposes, we are far from employing cryptocurrencies for trading purposes and therefore this is not a advised money control strategy. In the future, cryptocurrencies will be accepted as a currency similar to fiat currency, which will reduce “volatility” and allow hedging against fiat currency for greater control of money. – Sankar Krishnan, Executive Vice President, Capital Markets and Bank of Capgemini
Read more: A dogecoin millionaire explains why the recent fall doesn’t take away his optimism in the room itself, and stores his tips for new buyers.
“Bitcoin is treated as an intangible asset, which means that drops in the price of bitcoin deserve to be recorded and considered as an effect on profits. Unfortunately for those companies, the increases in the price of bitcoin are not reflected in the profits. they get all the disadvantages and none of the benefits. ” – Jerry Klein, managing director of investment firm Treasury Partners
“A wonderful corporate treasurer understands that when you have one of the most successful assets in the world, which also shows the greatest volatility, you want to look at how to integrate it. Throwing the baby out with the bathwater never makes sense. “Matthew Le Merle , Managing Partner of Blockchain Co-investors
“The host place of the cryptocurrency market is possibly here to stay, but my suspicion is like the metamorphosis of a caterpillar into a fly yet, the stability of the cryptocurrency market’s host place is not yet there. Until this happens, a company invests and takes a long-term position in an unregulated market, an acceptance tool like cryptocurrencies get my approval. “- Sam Onigbanjo, founding partner of Capital Markets Academy, London