The popular decentralized exchange, Uniswap, is having one of its latest governance proposals stonewalled by the crypto venture capital giant Andreesen Horowitz (a16z). The ongoing proposal vote, which ends on February 10, is currently 38% weighed against the change – almost entirely due to the software investor. So Much for Decentralization The proposal, tabled by 0xPlasma Labs on February 2, would have Uniswap v3 deployed to BNB chain. To enable the deployment, the proposal chose to use Wormhole – an…
Bitcoin as a Treasury Asset
Adding Bitcoin as a Treasury Asset means that an organization chooses to hold a portion of its reserves in the form of the cryptocurrency, Bitcoin. This is done by purchasing Bitcoin on a cryptocurrency exchange and then holding it in a digital wallet.
Regulations and laws regarding the usage of Bitcoin may vary by country, and the company’s legal counsel must also approve it before adding Bitcoin to their treasury.
The Future Of Bitcoin as a Treasury Asset
It is difficult to say whether or not Bitcoin will replace the dollar as a Treasury Asset. While Bitcoin has gained popularity as a store of value and a means of exchange, it still faces several challenges that may limit its widespread adoption.
One of the main challenges is its volatility, which makes it difficult to use as a stable store of value. The value of Bitcoin can fluctuate significantly in a short period, which makes it difficult for companies to plan their finances and budget accordingly.
Another challenge is the lack of widespread acceptance and understanding of Bitcoin. While more and more businesses are starting to accept Bitcoin as a form of payment, it is still not as widely accepted as traditional forms of currency. Additionally, many people still do not understand how Bitcoin works or have concerns about its security.
Finally, the regulatory environment for Bitcoin is still uncertain in many countries. Some countries have outright banned Bitcoin, while others have strict regulations that make it difficult for companies to use it.
That being said, the acceptance of Bitcoin as a treasury asset has been growing, becoming a mainstream asset. With more institutional investors and companies investing in it, it could potentially challenge the role of the dollar as a global reserve currency in the future. But it’s still in the early days, and it’s hard to predict how it will evolve in the long run.
Companies that Have Bitcoin in Treasury
Several major companies have added Bitcoin as a Treasury Asset:
- For example, MicroStrategy, a business intelligence company, has invested a significant portion of its cash reserves in Bitcoin and has become a vocal advocate for other companies to do the same.
- Tesla, Inc. announced in February 2021 that it had invested $1.5 billion in bitcoin and also added that it would start accepting Bitcoin as payment for its products. However, they sold 90% of the Bitcoin in 2022 and stopped accepting Bitcoin for its products citing “environmental concerns.”
- Square, Inc. invested $50 million in Bitcoin in October 2020, citing the cryptocurrency’s potential to serve as a “more globally accessible means of exchanging value.”
- Meitu, a Hong Kong-based technology company, announced in December 2020 that it had invested $40 million in Bitcoin and Ethereum.
- Mass Mutual, a life insurance company, announced in December 2020 it had purchased $100 million in bitcoin.
These are just a few examples, but it is important to note that the regulations and laws regarding the usage of Bitcoin may vary by country, so not everyone can add it, even if they want to.