Galaxy Digital co-president explains two things deterring institutional crypto buying

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In the past few months, companies like MicroStrategy and Tesla have taken significant positions in Bitcoin. However, this trend has not yet become the norm for most businesses. Damien Vanderwilt, co-president of Galaxy Digital, believes security and taxes could act as a deterrent to crypto investments.

“When we reflect on the conversations we have with corporations, institutional clients, and some of these constituencies considering investing in the sector, the first order issue is security and the assets they buy will be safe and sound be available for sure, ”Vanderwilt told Bloomberg in an interview on Thursday.

“The second-tier problem, especially for businesses, is tax treatment and the way Bitcoin is viewed as an intangible asset, particularly under US Gaap accounting,” he added.

The Bloomberg interviewer found that “5% of finance managers” are considering Bitcoin purchases. That 5% figure comes from a recent report by research firm Gartner that listed the results of a February survey of 77 financial managers. “Only 5% of the finance managers surveyed in February 2021 said they would consider Bitcoin as a corporate asset in 2021,” Gartner said in a February 16 public statement on the report.

MicroStrategy, MassMutual, Tesla, and Square have allocated millions of dollars to Bitcoin. MicroStrategy spent more than $ 1 billion on the asset and recently invested another billion in BTC. Square recently announced it would add $ 170 million worth of Bitcoin to its stack. The company spent $ 50 million on the coin last fall.

“They’re not unsolvable problems or things that companies can’t get used to, but it takes a while,” said Vanderwilt of the two problems he mentioned.