Tesla’s $1.5 billion investment in bitcoin probably won’t inspire other major companies to spend their corporate cash on cryptocurrency, JP Morgan analysts say.
The electric-car maker’s move to spend 8 percent of its cash reserves on bitcoin spurred speculation that the digital currency might start appearing on more balance sheets.
But Tesla’s example is “unlikely to be followed by more mainstream corporates” because bitcoin would make their staid corporate treasuries much more volatile, according to a team of JP Morgan analysts led by Nikolaos Panigirtzoglou.
Corporate treasury portfolios — typically composed of bank deposits, short-dated bonds and money market funds — usually have an annualized volatility of about 1 percent, the megabank’s analysts said in a Tuesday research note. Read more…..
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In a filing with the Securities and Exchange Commission, the company said it bought the bitcoin for “more flexibility to further diversify and maximize returns on our cash.”