Wall Street analysts have peppered executives at other high-profile companies about possible bitcoin forays during recent earnings conference calls.
“We don’t have any plans to invest in bitcoin, so full stop there,” she said in response to a question from Morgan Stanley auto analyst Adam Jonas.
But she did not rule out the possibility of customers one day being able to buy Chevrolets, Buicks or Cadlllacs with cryptocurrency — just as Tesla is planning to let customers use bitcoin to buy its electric cars and trucks.
“This is something we’ll monitor and we’ll evaluate. And if there’s strong customer demand for it in the future, there’s nothing that precludes us from doing that,” Barra added.
But executives at other companies, particularly financial corporatins, remain unconvinced that bitcoin should be part of their cash-management strategies.
“My understanding is currently the accounting is different than other currencies and can create more volatility,” she added.
Volatility is a problem. The big swings in price will probably keep other major companies from putting corporate money into bitcoin.
Sure, the returns have been enormous as of late. But companies want stability from their corporate investments -— not an asset that has swung from a low of just above $4,000 to nearly $50,000 in the past year.
Taking the crypto plunge
Other companies are willing to embrace the risk.
But he differentiated between assets like bitcoin and so-called stable coins that are backed by existing government currencies. Kelly said that bitcoin and other crytpocurrencies are more like “digital gold.”
“They are predominantly held as assets that are not used as a form of payment in a significant way at this point,” Kelly said, adding that “fiat-backed digital currencies, including stable coins and central bank digital currencies…are an emerging payments innovation that could have the potential to be used for global commerce.”
In other words, Tesla’s purchase may lead more companies to consider buying bitcoin, but it’s not likely to create a massive groundswell of support just yet.
The biggest wild card
RBC analyst Mitch Steves said in a report earlier this month that if Apple decided to set up its own cryptocurrency exchange business (potentially through its Apple Wallet feature) then Apple “could immediately gain market share and disrupt the industry.”
Based on how much money Square derives from bitcoin-related revenue, Steves estimates that Apple could eventually generate more than $40 billion in revenue tied to bitcoin.
He also noted that Apple could fund any bitcoin exchange plans by adding about $1 billion to its balance sheet, saying that an Apple purchase of bitcoin would help validate it further and that “the price of the underlying asset would then go up in a substantial manner.”
Apple has not publicly discussed any plans to invest in bitcoin and the company did not respond to requests for comment.