What is the corporate treasury strategy using bitcoin? Companies are starting to adopt bitcoin as a treasury asset. Though bitcoin can be a high-reward asset, it's also a high-risk asset, considering the market volatility. The 60-day volatility index for bitcoin was 1.58% compared to 1.2% for gold, as of early 2025. Therefore, any company that chooses to hold bitcoin risks a liquidity crisis if they can't convert it to cash when needed.
What are companies facing as they look to incorporate bitcoin? In addition to market volatility, companies are facing regulatory challenges. The crypto regulation “Markets in Crypto-Assets Regulation” is being implemented throughout Europe, and these changes are more challenging for companies operating in multiple countries. Centralized exchanges like FTX led to fears of hacking and theft, as did having a third-party custodian.
How do companies prepare for these challenges? Preparing for these challenges can be distracting and complicated. Bitcoin's price volatility may cause rapid price swings, and companies may not have enough liquidity on hand to cover their own obligations.
What are the challenges from regulatory changes? Bitcoin does not suffer the same challenges from regulatory changes that companies encounter. Announcements regarding regulatory intentions often lead to price fluctuations. Companies want to store value, but regulatory uncertainty takes away from their confidence.
How are companies thinking about completing their operations? Companies that can access the treasury department and information from their various segments may look at Bitcoin favorably. The pro-crypto 2025 U.S. administration is trying to reduce enforcement actions against crypto firms to give them clarity, but uncertainty still exists.
What is the cost of maintaining compliance? Compliance also adds to the cost of maintaining a business. Companies must also comply with anti-money laundering or counter terrorism financing regulations. This adds to their operational expenses.
How do companies stay globally? Companies aiming to be global do not have the same luxury. Some countries are more crypto-friendly than others, resulting in diverse regulations.
How do companies protect themselves from the regulatory landscape? This may change as regulatory reforms have reduced risks from the regulatory landscape.
What are the advantages and disadvantages of bitcoin that will shape its future? Bitcoin's volatility creates opportunity for fintechs but also introduces risk. Fintechs can make operations more efficient using bitcoin because they have faster transfer times and lower transaction fees than traditional banking. However, high volatility also requires strong risk management to track market trends and adjust accordingly.
How can bitcoin be used to mitigate even more risk? The same volatility complicates the use of bitcoin for payroll. Employees may be reluctant to accept bitcoin as a payment method. The unpredictable nature of bitcoin may encourage companies to use stablecoins to pay employees.
How do companies get additional funding? Companies also question how its volatility will affect funding. Fintech funding in Asia has dropped due to market volatility.
What are alternative options to bitcoin to help businesses stay afloat? Companies may also consider alternatives to bitcoin. Gold and other alternative assets can help stabilize reserves and protect against market uncertainty.
How can treasury management help? Alternatively, companies may find stablecoins helpful for treasury management. Stablecoins are pegged to stable assets, limiting their volatility.
Is bitcoin the only option available to companies? Companies are also looking at a mix of currency. Adding bonds, precious metals and other investments can provide some stability without forgoing the digital asset space.
How are companies using hedging and risk management? Companies should also heavily utilize hedging strategies to help manage risk.
How is Semler Scientific allocating bitcoin? Semler Scientific will use bitcoin as a larger part of their treasury. The company is planning to hold 105,000 BTC by 2027, which is a grand plan to include a bold bitcoin treasury strategy.
How much bitcoin will Semler Scientific hold? The company's director of bitcoin strategy will be Joe Burnett, and they plan to have 10,000 BTC by 2025, 42,000 BTC by 2026, and 105,000 BTC by 2027.
Where will the company acquire this bitcoin? The company will acquire bitcoin through cash and equity.
What investments are important to the company’s market strategy? Semler Scientific has actually seen gains since they adopted this bitcoin strategy. The gains are not just from market performance, which have been 287% since they adopted. Their share price has also increased.
In short, companies must carefully weigh the pros and cons of using bitcoin as a company treasury asset to ensure they can pay possible costs incurred from its market volatility.
