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WHY BITCOIN FOR CORPORATE TREASURY MANAGEMENT?

OVERVIEW

Business Bitcoin holdings are expected to grow at a rate of 204–519 BTC daily until 2026, supported by improved accounting standards.

 

The adoption of Bitcoin by corporations such as MicroStrategy, Tesla, and Block Inc. signals a strategic shift in treasury management. Bitcoin offers solutions to modern economic challenges, including inflation, monetary debasement, and interest rate volatility. With its fixed supply of 21 million coins, decentralised nature, and growing global adoption, Bitcoin is becoming an essential asset in treasury strategies worldwide.

KEY REASONS TO ADD BITCOIN TO YOUR TREASURY

1. Hedge Against Inflation

  • Bitcoin’s verifiable scarcity protects against the erosion of purchasing power caused by inflation.

  • Central bank policies, such as quantitative easing, have driven unprecedented money printing, reducing the value of fiat currencies.

  • According to Fidelity, Bitcoin’s fixed supply and decentralised structure make it a reliable inflation hedge in today’s macroeconomic climate.

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2. Diversification

  • Bitcoin offers uncorrelated performance compared to traditional treasury assets, allowing businesses to diversify holdings and reduce the risk of concentrated losses during economic downturns

  • Studies of Bitcoin’s integration into investment strategies suggest that even a 1-2% allocation can enhance portfolio resilience without significantly increasing overall risk.​

  • Bitcoin's percentage of treasury holdings varies across organisations, underscoring its adaptability in meeting diverse financial strategies.

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3. Strategic Competitive Advantage

  • Early adoption of Bitcoin can differentiate businesses in the market, attracting tech-savvy stakeholders and aligning the company with emerging financial trends​.

4. Long-Term Growth Potential

  • Bitcoin has consistently outperformed major asset classes since its inception, with early adopters seeing exponential returns.
    MicroStrategy’s holdings of 214,400 Bitcoin, valued at approximately $15 billion in 2024, demonstrate its potential for significant long-term growth.

  • Fidelity highlights that Bitcoin’s pre-adoption phase offers substantial growth opportunities for corporates willing to take a forward-looking approach.

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5. Store of Value

  • Like gold, Bitcoin is seen as a safe haven asset, particularly in high-inflation economies.

  • Unlike gold, Bitcoin offers better portability, verifiability, and scarcity. Companies like Semler Scientific view Bitcoin as “digital gold” with asymmetric upside potential.

 

6. Liquidity and Accessibility

  • Bitcoin operates on a 24/7 global network, providing unparalleled liquidity and ease of access compared to traditional assets.

  • Corporate treasurers benefit from Bitcoin’s ability to facilitate cross-border transactions seamlessly.

 

7. Regulatory Support and Accounting Improvements

  • The UK aligns with IFRS standards, which are expected to adopt fair value accounting for Bitcoin, enabling businesses to report holdings at market value and simplifying financial reporting.

  • The FCA regulates digital asset service providers, offering secure and compliant custody and trading solutions to reduce counterparty risk for UK businesses.

  • HMRC treats Bitcoin as an exchange token, with gains subject to corporation tax. Transparent rules simplify accounting for corporate Bitcoin holdings.

  • The UK’s proactive approach, including Cryptoasset Taskforce guidance and FCA initiatives, encourages businesses to explore Bitcoin adoption with confidence.

ECONOMIC CONTEXT: WHY BITCOIN NOW?

Post-COVID Economic Challenges

  • Central banks’ monetary responses to the COVID-19 pandemic led to unprecedented levels of fiscal stimulus, injecting $10 trillion into the global economy within months.

  • Inflation rates spiked, with the U.S. CPI reaching 9% in 2022 and stabilising at 3-4% in 2023.
     

Interest Rate Volatility

  • Historic interest rate hikes between 2022 and 2024 created challenges for corporate treasury strategies.

  • Bitcoin’s lack of dependency on yield makes it an attractive alternative during both low and high-interest rate environments.

Monetary Debasement

  • Central banks often print money to manage debts, eroding the value of fiat currencies. Bitcoin’s fixed supply counters this risk, making it a reliable store of value.

STRATEGIC BENEFITS FOR YOUR TREASURY

1. Optimised Risk Management

  • Bitcoin diversifies risk while preserving liquidity, enabling businesses to withstand economic shocks.

  • Its uncorrelated nature reduces dependency on traditional asset classes.


2. Financial Sovereignty

  • Bitcoin’s decentralised network ensures control over corporate assets, reducing reliance on centralised financial institutions.


3. Enhanced Corporate Image

  • Early adoption signals innovation and forward-thinking, positioning companies as leaders in financial strategy.

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PRACTICAL IMPLEMENTATION: HOW TO GET STARTED

Step 1: Define Strategy​

  • Consult with Bitcoin-focused advisors to design a tailored strategy.

  • Set objectives (e.g., inflation hedge, diversification) and decide on allocation.

  • Plan for volatility with clear risk management policies.

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Step 2: Secure Custody

  • Choose between self-custody (multi-signature wallets) or third-party custodians.

  • Implement robust security protocols and consider cold storage and insurance.

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Step 3: Ensure Compliance

  • Understand regulatory and tax obligations in your jurisdiction.

  • Align accounting practices with local standards (e.g., UK GAAP, IFRS).

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Step 4: Execute and Manage

  • Buy Bitcoin via trusted exchanges or OTC desks.

  • Monitor holdings and educate your team on market trends and treasury strategies.

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