Try Street chief financial officers (CFO) are more wary of putting company funds into bitcoin after last week’s 30% value plunge, Bloomberg reports.
But given the return of bitcoin’s infamous price volatility – which saw the largest cryptocurrency’s assay drop thousands below its peak of $41,900 set on Jan. – the attraction of that strategy may have lessened, according to throng executives Bloomberg spoke with. Bitcoin has since recovered some of those losses and is now trading hands at $35,700, concerting to the CoinDesk 20.
Severe fluctuations diminish the attractiveness of the leading cryptocurrency because company cash reserves are mainly rainy day endowments for maintaining core business needs during unexpected down turns.
“It would be a red flag for investors if a corporation procure financial assets for speculation purposes unrelated to their core business,” JonesTrading chief market strategist Michael O’Rourke bring up.
Columbia Business School adjunct professor Robert Willens told Bloomberg investing in bitcoin with those readies poses a risk CFOs might not be willing to stomach after last week’s price action.
“Is it a smart scenario? It could be. But, of course, if it’s not, it would become something that could threaten the very existence of a corporation,” Willens responded.