When Elon Musk's Tesla revealed it had added $1.5bn of bitcoin to its coffers last month, many thought there’d be a corporate charge towards the booming cryptocurrency.
Yet there's unlikely to be a concerted crypto charge any time soon, say many finance executives and accountants loath to risk balance sheets and reputations on a highly volatile and unpredictable asset that confounds convention.
"When I did my treasury exams, the thing we were told as number one objective is to guarantee security and liquidity of the balance sheet," said Graham Robinson, a partner in international tax and treasury at PwC and adviser to the UK's Association for Corporate Treasurers.
"That is the fundamental problem with bitcoin, if those are the objectives for treasurers, then breaking them could get them in trouble."
Tesla Inc's $1.5bn bitcoin bet saw it join business software firm MicroStrategy Inc and Twitter boss Jack Dorsey's payments company Square Inc in swapping some traditional cash reserves for the digital coin.
Proponents of the cryptocurrency see it as a hedge against inflation at a time of unprecedented government stimulus, a falling dollar and record-low interest rates that make attractive high-yielding assets hard to find.
While the moves have prompted more boardroom discussions though, headaches from bitcoin's volatility to accounting for it and storing it are likely to preclude a big wave of companies holding large amounts on balance sheets in the short term, according to over a dozen financial officers, board members and accountants.
"It will take more than a small handful of disruptive companies investing in bitcoin to impact the narrative in boardrooms," said Raul Fernandez, an entrepreneur and investor who sits on the audit committee of the board of chipmaker Broadcom Inc as well as other companies.
"Larger global companies, I can't see those conversations happening right now."
Publicly listed companies together hold around $9 billion of bitcoin, data from the Bitcoin Treasuries website shows. Around 80% is held by Tesla and MicroStrategy, the latter with over $4.5 billion.
Square, which allows users to buy and sell bitcoin, said last month it had added an additional $170 million of the virtual coin to its coffers.
Of course, if the price of bitcoin rises, a company can always simply sell its holdings, thus realising some gains. Yet it is still a risky investment, given the cryptocurrency's record of wild swings.
In 2013, for example, bitcoin started at around $13 and spiked to over $1,000. In 2017, it went from about $1,000 to around $20,000. In early 2020, it sunk below $4,000. It fell more than 25% late last month only a week after hitting a record high above $58,000. It has now recovered part of its losses.
About 5% of chief financial officers (CFOs) and senior finance leaders said they planned to hold bitcoin on their balance sheets in 2021, a survey of 77 executives by U.S. research firm Gartner found last month.
Some 84% of respondents said they did not plan to ever hold it as a corporate asset, citing volatility as the top concern, followed by board risk aversion, slow adoption as a widespread method of payment and regulatory issues.
"I think for the most part you will find companies will avoid that sort of thing," said Jack McCullough, president of the CFO Leadership Council and a former CFO.
"CFOs are likely to be very conservative in managing corporate treasuries. They're happy sinking money into very safe places with low interest. Their job is to help grow the company through its operations, and the treasury needs to be safe and secure."
Cryptocurrency supporters, however, say the rationale for companies to buy bitcoin is clear, not least the decline of the dollar – the dominant reserve currency – which has fallen about 4.5% against a basket of major currencies in the past year.
"The value of the dollar over time is getting weaker and weaker," said Dave Sackett, CFO of ULVAC Technologies Inc, the U.S. subsidiary of a Japanese vacuum equipment maker, and an active cryptocurrency investor.
"Bitcoin flips the script on that."