Bitcoin technology firm River has predicted a significant shift in corporate treasury strategies over the next 18 months, predicting that around 10% of U.S. companies will allocate around 1.5% of their cash reserves to Bitcoin, totaling an estimated $10.35 billion.
The move comes amid a growing trend among businesses to seek alternatives to traditional financial strategies that are increasingly seen as inadequate in the face of persistent inflation, according to the company.
River’s analysis highlights the shortcomings of traditional corporate treasury management, which often relies on cash and short-term equivalent assets. While these assets can provide modest returns close to the current 5%+ interest rate, they often fail to keep pace with inflation, resulting in a gradual erosion of value.
The analysis notes that companies that hold a portion of their reserves in Bitcoin are better positioned to resist inflationary pressures. Since 2020, businesses that allocate a 3% allocation to Bitcoin have been found to be more resilient to the erosive effects of inflation.
River's report also included the example of Apple, one of the world's most valuable companies, which has reportedly lost $15 billion of its treasury assets due to inflationary erosion over the past decade.
*This is not investment advice.