Gartner Survey – 5% of Enterprise CFOs Intend to Invest in Bitcoin this Year
A brief survey of financial executives indicated that 5% of enterprises aim to purchase Bitcoin (BTC) for their treasury in 2021. Another 11% has stated that they would acquire the asset by 2024. The poll carried out by Gartner has come against the backdrop of news that Tesla used 8% or $1.50 billion of its cash reserves for the purchase of Bitcoin.
Interestingly, front-runner among enterprises, MicroStrategy Inc. which has bought considerable quantity of Bitcoin is raising $600 million through a convertible bond offering with the aim of utilizing the funds to purchase more Bitcoins.
The 77 participants in the survey, including 50 chief financial officers, responded with a range of views on the basis of the sector under which the company operates. The tech industry has the maximum affinity towards Bitcoin, with 50% of survey participants expect to hold onto the crypto in the coming months, irrespective of how big their firm is.
Even though a big chunk (84%) of those participated in the survey stated that their major worries about investing is the volatility risk that Bitcoin is known for. It also seems that so many of them prefer to be on the sideline currently and understand how things develop.
Over 70% of the survey participants wanted to know what others are doing with their crypto and Bitcoin holdings. A comparable number want to receive regulators reply on the likely issues they may face for long-term holding of the numero uno crypto. Alexander Bant, Gartner’s chief of research, pointed out that “Finance leaders who are tasked with ensuring financial stability are not prone to making speculative leaps into unknown territory.”
He further stated that “It’s important to remember this is a nascent phenomenon in the long timeline of corporate assets. Finance leaders who are tasked with ensuring financial stability are not prone to making speculative leaps into unknown territory.”
Other worries mentioned by survey participants are risk aversion (39%), slow adoption in the form of exchange or mode of payment (38%), not adequate understanding (30%), threats from hackers and other internet risks (25%) and cumbersome accounting process (18%).
Even though it is not easy to come up with empirical results from a negligible sample size, an inference on the impact on Bitcoin from rising corporate investment can be understood. In the later-half of 2020, enterprises not falling under the utility or financial sectors and listed in the S&P Global owned roughly $2 trillion as cash reserves. It is basically twice the current market cap of Bitcoin. This implies that there is tons of money that could theoretically be invested in Bitcoin.
The tech industry has a minimum of $640 billion freely available for investment, although only a miniscule portion has been set aside for investment in Bitcoin. ARK Invest, an investment firm, stated earlier in February that if “all S&P 500 companies were to allocate 1% of their cash” for investment in Bitcoin, the price of numero uno crypt will increase by about $40,000, or closer to $90,000.
In case corporate investments increase to 10% of cash holdings, Bitcoin’s price would reach $400,000. The survey reflects a huge increase in knowledge about Bitcoin, in comparison to Gartner’s 2018 poll which saw only 66% of company’s CIOs had a knowledge about blockchain technology.