At this juncture, only a few companies have put their money into bitcoin. But, it is no secret that Elon Musk has been a vocal supporter of bitcoin and other digital currencies.
Although cryptocurrencies hardly play a role in the old-fashioned world of corporate treasury, Elon Musk, the chief executive of Tesla has put $1.5 bn of his company’s spare cash into bitcoin last month. As the news started doing rounds, the company’s shares surged 1 per cent with the price of bitcoin staging a strong rally.
However, the experts in the corporate treasury management are skeptical about the move and believe that it hardly makes any sense to make such a change. Jerry Klein, a managing director at Treasury Partners said that the corporations prefer to invest their cash in high quality, short-term fixed income securities, rather than risky assets like bitcoin, as they prefer low rate of return instead of possible declines.
At this juncture, only a few companies have put their money into bitcoin. But, it is no secret that Musk has been a vocal supporter of bitcoin and other digital currencies. Tesla also said that it would start accepting payment in bitcoin in a limited way very soon.
Over the last couple of years, Bitcoin prices have fluctuated. In March, the prices fell as much as 63 per cent from highs hit a few weeks earlier. Since then. the prices have again surged. Some of the experts are of the opinion that such a move could be simplistic for institutions committed to environmental, social and governance issues.
Having said that, cryptocurrencies could lead to a better economic growth with big advantages for sustainability, if at all it succeeds in the first place.
