After Tesla’s $1.5 billion Bitcoin purchase, many in the crypto-community expected more Fortune 500 companies to soon follow suit. In fact, a host of names such as Apple, Oracle, and Microsoft were speculated to be next in line.
However, technology giant Microsoft is unlikely to invest in Bitcoin any time soon, according to a senior member of its executive team. During a recent interview with CNN’s Julia Chatterley, President Brad Smith revealed that the company hasn’t made any changes to its investment policy so far, with Microsoft having no immediate plans of investing in the digital asset.
“I haven’t heard any new conversation about Bitcoin.”
It should be noted though that unlike Microsoft, there might be other companies more inclined towards investing in cryptocurrencies such as Bitcoin, especially since most aim to minimize any downside risk to their earnings.
As previously mentioned, lots of names have been thrown about to answer the hypothetical of which company will be next. For instance, according to CoinGecko’s Bobby Ong,
“In my opinion, the next company to look out for will be Twitter. Its CEO, Jack Dorsey, is a known proponent of Bitcoin. The other company he leads, Square had already purchased $50 million worth of Bitcoin in 2020. Following on, I would expect other Big Tech companies such as Facebook, Alphabet, and Amazon to invest in Bitcoin.”
As things stand, most U.S companies, like Tesla, use “indefinite intangible accounting.” This means that any depreciation in fair values of digital assets held on a company’s balance sheet below their carrying values after the acquisition reflects in an “impairment charge.”
Companies are also not permitted to recognize any upward revisions in price until a sale of the asset. This may be why Square allocated only 2% of its cash reserves to Bitcoin and Tesla allocated around 8% – a fact touched upon recently by Avanti Founder Caitlin Long.
Simply put, senior executives may not be in a position to make a huge allocation to an asset class like cryptocurrencies as long as the current accounting rules prevail. This may be why a lot of companies are still hesitant about investing in cryptos.
With the passage of time, however, the aforementioned allocation will likely look even more expensive. Yesterday, the market’s leading cryptocurrency surged past the $50,000-level to reach a new all-time high of $50,341. At press time, Bitcoin was trading at $49,550.
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