Galaxy Digital names two major obstacles to bitcoin investment by companies
The crypto investment bank’s co-president is confident it’s only a matter of time before more and more companies invest.
In recent months, major companies such as MicroStrategy and Tesla have made massive investments in Bitcoin (BTC). However, most of the business world is yet to jump on board this trend, with Galaxy Digital Co-President Damien Vanderwilt seeing security concerns and tax issues as the main barriers.
„When I think about the conversations we have with corporations and institutional Crypto Revolt investors interested in investing in cryptocurrencies, the first major area of concern these clients cite is security. They wonder if the assets they are buying are safe and can be kept safe,“ the crypto investment bank’s co-president told Bloomberg in an interview.
„The second big area of concern that corporations in particular are bringing to us is the tax treatment, because under GAAP accounting rules in the US, bitcoin is classified as an intangible asset,“ Vanderwilt adds.
Bloomberg points out that currently only „5% of finance directors“ at large companies are considering buying Bitcoin
This figure comes from a recent study by market research firm Gartner, which surveyed 77 finance directors in February. „Only 5% of the participating finance directors we surveyed in February 2021 say they plan to purchase Bitcoin as an asset for their company in 2021,“ according to a statement on the survey.
MicroStrategy, MassMutual, Tesla and Square have all invested millions of dollars in Bitcoin recently. MicroStrategy alone has invested more than $1 billion in total. Just recently, the software producer added another billion. Square also recently bought an additional 170 million US dollars in Bitcoin. Last autumn, the payment service provider had already invested 50 million US dollars.
So the basic willingness of companies is there, which is why Vanderwilt is ultimately confident that the trend to invest in Bitcoin will consolidate in the future: „These issues are not unsolvable, nor are they things that companies can’t come to terms with at some point. It just takes time.“