Corporate America can’t help but talk about bitcoin. Tesla is to blame

Wall Street analysts have shown executives at other companies about possible bitcoin incursions during recent earnings conference calls.

GM (GM) CEO Mary Barra said during the carmaker’s earnings presentation earlier this month that GM had no plans to buy bitcoin yet.

“We have no plans to invest in bitcoin, so stop there,” she said in response to a question from Morgan Stanley auto analyst Adam Jonas.

But it did not rule out the possibility that customers could one day buy Chevrolets, Buicks or Cadilllacs with cryptocurrency – just as Tesla intends to allow customers to use bitcoin to buy their cars and electric trucks.

“This is something we will monitor and evaluate. And if there is strong customer demand for this in the future, there is nothing to stop us from doing so,” Barra added.

But executives at other companies, especially financial corporations, remain unconvinced that bitcoin should be part of their cash management strategies.

“We are not currently investing in cryptocurrencies,” said Leslie Barbi, the company’s investment director Reinsurance Group of America (RGA), during a earnings conference call last week.

“I understand that accounting is currently different from other currencies and can create more volatility,” she added.

Everything you need to know about bitcoin

Volatility is an issue. Large price fluctuations are likely to prevent other major companies from putting corporate money into bitcoin.

Of course, the yields were enormous until late. But companies want stability from their corporate investments – not an asset that has gone from a low of just over $ 4,000 to nearly $ 50,000 in the last year.

“We are looking for cryptocurrencies,” said Christine Hurtsellers, CEO of Voya Financial’s investment management unit, during a earnings call. However, she added that the factors that cause large price fluctuations may “still be somewhat opaque at times”. That is why Voya (VOYA) will not invest for the time being.

Taking the cryptographic dive

Other companies are willing to accept the risk.

So far, adze (TSLA) and software company MicroStrategy (MSTR) are the two most important companies that buy bitcoin. Huge payments Square (ff) and PayPal (PYPL) now allows customers to buy and sell bitcoin (XBT) and use cryptocurrency for e-commerce transactions. MasterCard (ME) and Bank of New York Mellon (BK) he dips his toes into the waters of digital currency.
Twitter (TWTR), which like Square is led by Jack Dorsey, looks even more at bitcoin and other cryptocurrencies.
“We did a lot of anticipation to consider how we could pay employees if they asked to be paid in bitcoin, how we could pay a provider if they asked to be paid in bitcoin and if we should have bitcoin in balance, “said Twitter chief financial officer Ned Segal an interview with CNBC after the company reported earnings last week.
Visa (V) CEO Al Kelly also remarked during his company’s latest earnings call that “there is a growing interest in digital currencies.”

But he differentiated between assets such as bitcoin and so-called stable currencies that are backed by existing government currencies. Kelly said bitcoin and other cryptocurrencies are more like “digital gold.”

“They are predominantly held as assets that are not being used as a form of payment in a meaningful way at the moment,” Kelly said, adding that “fiat-backed digital currencies, including stable currencies and central bank digital currencies.” are emerging payment innovations that could have the potential to be used for global trade. ”

In other words, the acquisition of Tesla may cause several companies to consider buying bitcoin, but it is not likely to create a massive fund of support yet.

The biggest wild card

Some hope that Apple (AAPL), the most valuable company in the world, could be next. Apple could allow buyers and sellers to trade bitcoin and also invest directly in cryptocurrency, such as Tesla.
Bitcoin is growing, approaching $ 50,000 for the first time

RBC analyst Mitch Steves said in a report earlier this month that if Apple decided to set up its own cryptocurrency exchange business (possibly through its Apple Wallet feature), then Apple could immediately gain shares. market and could disrupt the industry ”.

Based on how much money Square derives from bitcoin-related revenue, Steves estimates that Apple could eventually generate more than $ 40 billion in bitcoin-related revenue.

He also mentioned that Apple could fund any bitcoin exchange plans by adding about $ 1 billion to its balance sheet, saying that a bitcoin acquisition from Apple would help validate it and that “the price of the underlying asset it would then grow substantially. “

Apple has not publicly discussed any plans to invest in bitcoin, and the company has not responded to requests for comment.

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