How Crypto Currencies Slowly Invaded Wall Street
Fifty-two publicly traded companies, collectively capitalized at $ 7.1 trillion (or € 6.1 trillion), are exposed to cryptocurrency risks, estimates a study by MSCI, a financial analysis firm .
By YEET MAGAZINE | Updated 0439 GMT (1239 HKT) October 16, 2021
Wallets are filled with cryptocurrency, and the risks associated with it.
A Trader on the New York Stock Exchange on September 30, 2021. | York Spencer Platt / AFP
Wallets are filled with cryptocurrency, and the risks associated with it.
Fifty-two publicly traded companies, collectively capitalized at $ 7.1 trillion (or € 6.1 trillion), are exposed to cryptocurrency risks, estimates a study by MSCI, a financial analysis firm .
While some of them are specialized in cryptocurrencies, such as Coinbase, the leading cryptocurrency exchange, more and more traditional companies are now also taking part in this market.
Tesla, for example, is a simple car maker, but the company has millions of dollars in bitcoin . This is also the case for the computer company Microstrategy, or an electronic payment company, Square founded by Jack Dorsey, the CEO of Twitter.
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Other companies, such as institutional banks JP Morgan Chase or Goldman Sachs offer their customers to invest in cryptocurrency funds.
Risky investments
What this foray of cryptocurrencies into the finances of publicly traded companies means, MSCI explains, is that institutional investors' portfolios can thus be filled with these currencies without them even knowing it.
However, they are extremely volatile. Tesla's bitcoin investment earned him $ 1.5 billion, then lost $ 20 million, then climbed back to a profit of several hundred million, in the space of a few months .
“Some simple questions get very complicated ,” says Harlan Tufford, an MSCI researcher. For example, who in the box knows the password that allows you to access your private and anonymous wallet which contains, you know, a billion in bitcoins? And how are you doing to control that? " .$
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Investors and executives of large companies do not seem ready for the foray of this new technology into their finances. MSCI reviewed the pedigree of 6,500 members of major boards of directors. Only 79 of them mention experience in cryptocurrency or blockchain.
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