Tesla's Bet on Bitcoin Is Unlikely to be Emulated by Many Companies

Abstract : Cryptocurrencies played little role in a stable world of corporate finance.


Feb 11

February 11 (ChainDD) According to an article published by Financial Times, Tesla's bet on Bitcoin is unlikely to be emulated by many companies.

The article said that cryptocurrencies played little role in a stable world of corporate finance, while protecting a company's financial liquidity and cash reserves was essential. The huge turmoil in cryptocurrencies has ruled that out.

Jerry Klein, managing director of Treasury Partners, an investment management firm based in New York, said that "companies are investing cash in short-term securities with fixed income and very high quality.They are willing to accept relatively low returns. I see no reason to invest corporate cash in risky assets such as Bitcoin, which could experience a significant decline."

Besides, the article noted that a large amount of bitcoin investment could also undermine Musk's stated intention to build a new type of conglomerate to combat climate change. Ethan Buchman, co-founder of Cosmos, said Tesla already faces potentially larger ethical considerations given that mining involves extracting materials used in car batteries.

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