Tesla's purchase of Bitcoin caused thousands of waves with one stone, and many investors were wondering whether other big technology companies would follow suit. The Royal Bank of Canada even predicted that Apple would be the next big company to buy Bitcoin. They may even develop a virtual currency exchange. If that's the case, Bitcoin will undoubtedly take another big step towards the mainstream, but is it really that simple?

The first task of a company's treasury is to ensure the company's financial liquidity and cash reserves, and from this point of view, virtual currency is a polarized choice-such assets are too volatile.

Of course, that's not enough to stop Musk (Elon Musk) from allocating $1.5 billion of his company's cash in bitcoin. The price of bitcoin skyrocketed on Sunday, when the news was revealed in the annual report. In the eyes of corporate treasury experts, however, Mr Musk's move makes little sense.

Companies typically invest their cash in highly liquid short-term fixed income securities and do not hesitate to accept relatively low returns in order to ensure liquidity. "I don't think corporate cash can be invested in risky assets like bitcoin, which could fall sharply at any time," explains Klein (Jerry Klein), executive director of Treasury Partners, a New York-based investment management firm. "

With the exception of a few Bitcoin speculative listing tools designed specifically for stock market investors, only a very small number of real companies have invested in Bitcoin. One of the pioneers was ecommerce company Overstock, although their last disclosure showed that the company held only $2 million worth of bitcoin.

MicroStrategy, a software company, took a bold move last year, investing in bitcoin at a good time to put all the progress it didn't need for the time being. Last week, the company disclosed that it had invested a total of $1.145 billion, which is now worth $3.2 billion.

Sylar (Michael Saylor), the company's chief executive, called the investment the company's "second strategy", second only to selling software products-in other words, the problem went beyond the vault level for them. He also said that this is also to let more potential enterprise information technology buyers know their brands and help drive software sales.

For Tesla, whose market capitalization has exceeded $800 billion, it is clear that a Bitcoin speculative transaction of this size is unlikely to rise to the height of the second strategy. However, they allow car buyers to pay in bitcoin, but they can greatly promote their brands in the currency circle.

In fact, after a series of high-profile platforms for Bitcoin and other virtual currencies, Musk has won a large following in the virtual asset world. Tesla also said that they will quickly start a plan to accept bitcoin payments, but first of all, limited to a small circle, presumably to cover fans of Musk's virtual assets.

While Musk's enthusiasm for bitcoin may prove correct in the long run, it may pose some imminent risks in the short term.

For example, the company's profitability will be threatened. Like MicroStrategy, Tesla's virtual currency investment is included in the category of intangible assets together with other long-term values such as goodwill. This means that, according to accounting standards, they must reassess the value of bitcoin investments every time they report results and include any losses in the company's costs. On the other hand, if the bitcoin investment increases in value, they can't include it in the profit-- it can only be reflected as a profit when it is finally sold.

Tesla's quarterly profits are already volatile because much of the revenue comes from carbon credits sold to other automakers, which have nothing to do with their core car business. Once the price of bitcoin falls sharply, the extreme trend of profits will further increase-although the maximum loss is unlikely to exceed $1.5 billion, Tesla will obviously make further investments in the future. In the annual report, Tesla disclosed that the company's board of directors has authorized management to buy gold and other digital assets.

"it's very rare, it's risky, and it may not be able to achieve the effect they want. Harvey (Campbell Harvey), a professor at Duke University, commented, "if it's a hedge fund and your clients know what you're doing, there's no problem investing in bitcoin. You're a speculator, sometimes you succeed, sometimes you fail, it's all normal." However, Tesla is not a hedge fund. "

In fact, over the past decade, the largest blue-chip companies have slowly become full-time asset managers, and as their cash reserves continue to swell, these companies have somewhat gone beyond the boundaries of traditional deposits and money market funds and started making some other investments. However, these so-called cross-border behaviors only go to areas such as government bonds, corporate bonds and asset-backed bonds, which are still relatively safe and liquid. Apple, for example, holds about $200 billion in cash and securities, 48% of which is corporate debt, according to data at the end of December.

Bitcoin prices have behaved wildly over the past 12 months. At the height of the March sell-off, prices fell 63% from their highs a few weeks ago. Since then, the price of bitcoin has soared again, reaching as much as ten times the trough. Bitcoin

Yermark (David Yermack), a professor at the University of New York, said that even now, virtual currency is still a new thing, and accounting and tax regulators have yet to come up with guidelines to guide companies on how to deal with such investments. He added that Tesla's move may speed up the introduction of relevant policies and regulations.

"it must be put on the agenda as soon as possible. "over the years, many companies have shunned Bitcoin, in large part because their financial staff do not know what the latter should do with accounting," he points out. "

Musk once declared that he planned to build a new type of integrated enterprise to combat climate change, and the large bitcoin investment is ironic from this point of view, clashing with his people-as we all know, Bitcoin mining consumes a lot of electricity.

Some virtual asset experts also pointed out that investing in bitcoin clearly runs counter to the increasingly respected (ESG) investment philosophy of environmental, social and corporate governance, and may cause many institutions to stay away from Tesla's shares.

Bachman (Ethan Buchman), one of the founders of the virtual currency program Cosmos, said Tesla may have thought more deeply about this because mining is related to extracting the materials used in car batteries. He also claims that if virtual currencies such as bitcoin succeed, it will lead to more robust and sustainable economic growth in the long run.