According to a recent survey, most finance managers still choose to stay away from Bitcoin as the asset’s increased volatility presents high risks.
Only 5% of companies want to enter the sector
Although several well-known companies have allocated funds to BTC recently, a survey of 77 financial managers showed that the total number of firms planning to enter the BTC caravan is relatively modest, with only 5%. As expected, many justified their skeptical decisions by the volatility of BTC.
Tesla shocked the world last week after reports emerged that Elon Musk’s electric vehicle giant bought $ 1.5 billion in Bitcoin. Apart from the sudden price surge, the allocation had other implications for BTC, as many other companies and executives began to offer their opinion on whether to follow Tesla’s example.
So far, most companies seem to have little or no intention of putting the primary cryptocurrency on their balance sheets. At least that’s what data from a survey compiled by Gartner says.
Bitcoin volatility is the biggest reason
The research firm asked 77 financial executives (including 50 CFOs) about their company’s approach to Bitcoin. Despite the growing interest, the percentage of those who could discover the potential benefits of buying BTC was still fairly low.
As of February 2021, only 5% said they were planning to buy Bitcoin as a corporate asset this year. In contrast, 84% said they never plan to “keep” the primary cryptocurrency.
When commenting on why they would not buy BTC, executives surveyed highlighted several main reasons. Naturally, Bitcoin’s volatility took the first place as it raises risks for investors.
Gartner Finance’s Chief of Research Alexander Bant said:
“Eighty-four percent of respondents said Bitcoin’s volatility poses a financial risk. It will be extremely difficult to alleviate the price fluctuations seen in the cryptocurrency in the last five years. ”
Can their decisions change in the future?
As the chart above shows, other reasons include board risk aversion, slow adoption, regulatory concerns, and lack of information.
The tape explained that the cycle of cryptocurrency adoption and development is still very early, which makes traditional investors more cautious about allocating any funds. However, he acknowledged that BTC’s growth has caught their attention and could play an important role in companies’ balance sheets in the future if the asset continues to evolve, including in terms of image.