Corporations investing in crypto

Guidelines and considerations for companies on digital asset allocation

More and more operating companies have begun allocating cash to digital assets and cryptocurrencies. This is a new dynamic and a departure from more conventional investing by funds and others in this space. How would you do that? Explore these guidelines for the relevant questions, processes, and procedures supporting such a decision.

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Some operating companies are actively allocating cash to digital assets. We began to see meaningful examples of this dynamic in 2020, and it continues despite the fluctuations and turbulence in the markets. One early example was MicroStrategy Inc., which in 2020 announced that it had made more than $1B in bitcoin purchases and then continued to acquire more in subsequent years. They characterized it as an investment that would “provide the opportunity for better returns and preserve the value of our capital over time compared to holding cash.”1 Some companies have followed suit, and others may now be wondering how to invest in bitcoin and other digital assets. There are a variety of reasons for adding digital assets to a company’s balance sheet, whether it’s seeking asymmetric risk return observed over previous years or as a natural hedge against fluctuating fiat currencies; it’s part of a corporate strategy to embrace modern, open technologies; or it’s a complement to an operational strategy that includes accepting digital assets as payments.

This paper focuses largely on bitcoin investments, considering recent increased corporate investments in bitcoin and its common reference as a store of value. It should be noted that there are numerous types of digital assets, each having its own unique characteristics. Ether (ETH) is also viewed as a store of value, with the added use of enabling transactions on Ethereum-based decentralized applications. These contrast with central bank digital currencies (CBDCs) and stablecoins, which are digital representations of fiat currency. Their value is derived from the actual currency in circulation, and, in the case of CBDCs, are issued by a central bank. Equity and derivative tokens are digital assets whose value may represent actual corporate stock or a legal right to another asset or financial instrument. Some digital assets have additional attributes, such as voting rights on a protocol, or they may provide a level of access for participation in a decentralized application. These may provide some commercial or economic benefit to the holder. Prior to investing in any digital asset, it is important to understand the specific terms, conditions, and characteristics of the investment since those will affect accounting, tax, risk, controls, and legal considerations, among others.

What follows here, then, is some guidance on what undergirds any corporate decision to invest in digital assets like bitcoin. In addition, we set out the ongoing actions that teams across a company should undertake to monitor and go forward with a long-term investment. In other words, our goal is to answer the question “How would you do that?” rather than “Why do it?”

Before proceeding, we want to make one point absolutely clear: There is no playbook or foolproof approach for these kinds of bold moves. There is only painstaking effort, disciplined analysis, fresh thinking and rethinking, dedicated collaboration across competencies, and, above all, rigorous execution. What follows, then, is not a step-by-step prescription but instead a high-level guided tour of the wide terrain companies may cover when they are considering investing in bitcoin. Given the many variables and different characteristics of digital assets, the provisions presented in this POV are not necessarily pertinent or germane to all digital assets. Nonetheless, the broad methodology and considerations set out here may apply to multiple corporate investment scenarios in select digital assets.

Global macroeconomic, monetary, and digital evolutions have converged, requiring all forward-thinking corporations to consider alternative assets on their balance sheet. The ecosystem and the regulatory environment for digital assets, especially bitcoin, have matured to the point that this strategy is becoming approachable and mainstream.

—Phong Le, President and CEO, MicroStrategy Inc.


The terrain of digital assets is a new frontier of possibilities, so it could require that each corporate department, along with its external advisors, rethink the application of the rules and policies of their respective core competencies.

The high-level view from corporate treasury

Generally, the main purpose of the treasury function is risk management and the preservation of capital. When deciding and executing on digital assets for investment and operational purposes, digital assets governance risk can be key to all activities. More than creating a policy, governance typically includes understanding the types of investment the company is making and where this alternative investment vehicle—digital assets like bitcoin—fits within the broader investment strategy. Leaders should also be comfortable with the characteristics and nature of the vehicle (more on this below in the discussion on controls). Given that it’s a financial investment, it’s important that the treasurer, CRO, CEO, CTO, CFO, and board of directors all have a clear assessment and understanding of the asset’s risk profile, the company’s tolerance for risk, and how these two may align or diverge. Ultimately, governance is about monitoring and assuring that the conditions and requirements set by the organization are maintained.

Tolerance for risk, depending on the stake and type of digital asset, may have to be periodically adjusted. Risk tolerance takes several forms and requires decisions on issues such as the following:

  • What percentage of the cash on hand, after accounting for operating costs, will be assigned to alternative investments in digital assets?
  • What range of risk is the company comfortable with? Governing risk is rarely a matter of “set it and forget it.” Risk is a constantly moving target, and adjustments within an agreed-upon band of risk tolerance may need to be made frequently.
  • With digital assets, treasury should consider not just the investment side but also how these assets may figure into daily operations such as payments, debt management, raising funds, IPOs, etc.

There are other key considerations a treasurer should evaluate when adding digital assets to the company’s operations. Understanding of the underlying features tied to specific digital assets is important in helping effectively utilize and deploy the asset to its full potential while also implementing a robust control structure to help ensure proper usage. Control and storage are often imperative elements for an organization, whether they intend to manage the asset themselves (self-custody), leverage a third party, or take a hybrid approach. The storage decision can allow an organization to determine its exposure to counterparty risk, as each option varies to the control and ownership of the asset. The failures of certain banks and digital asset exchanges have emphasized the importance of understanding exposures held at external platforms and at institutions. The importance of risk management applies when managing digital assets that are spread across multiple wallets, exchanges, and custodians.

With emerging technologies, a holistic view is likely needed to help an organization review its positions and liquidity across its wallets and exchanges due to the asset’s volatile nature when compared to traditional fiat. New technology and vendors have emerged focused on reporting, management, transactional activity, and utilization of digital assets within a single platform. Multiple vendors have built out integrations with leading treasury management systems to enable real-time visibility for liquidity and reporting that supports the treasury function. Treasuries that adopt digital assets should have a risk assessment framework to identify where exposures exist, how the assets are managed, and if the system has adequate controls in place. Points outlined below highlight key factors for corporates to consider for treasury:

  • Overall purpose, function, and how digital assets will be utilized (payments, investments, staking, etc.)
  • Establishment of internal and external controls that comply with digital asset specific policies to properly manage digital assets across business units
  • Ability to integrate digital assets into key treasury operations to fulfill the organization’s objectives and strategy

How can treasury be more strategic in using these assets to advance efficiencies in payroll, vendor payment, trade, customer interactions, and cross-border transactions with subsidiaries and others? (Below, there is more on this last point when we discuss accounting and tax implications as well as controls.) A first and final refrain for treasury should be that the governance of digital assets is a living and adaptive process. It can constantly follow and should adjust to market, regulatory, and risk realities.

Since MicroStrategy launched our digital asset treasury strategy in 2020, the Bitcoin asset class and the community supporting it has continued to grow and mature with further adoption from large sophisticated financial institutions and support from accounting, tax, and legal specialists. We find it to be auspicious that further regulatory clarity, including the expected finalization of fair value accounting rules for digital assets by the Financial Accounting Standards Board could help enable further adoption and support from large institutional and retail investors. These advancements along with additional use-cases developed through layer 2 technologies such as the Lightning network, we believe will further propel Bitcoin’s importance as a form of digital energy and long-term store of value.

—Andrew Kang, CFO, MicroStrategy Inc.

Liquidity may not be the prime consideration, especially if the company is adopting a longer-term investment mindset. Nevertheless, there should be appropriate provision for extra cash on hand. And assuming investments are layered in progressively over time, liquidity is likely to be less of an issue. Yet, in the event of the need to liquidate assets, the company may need to know if the facility to do so is available without a premium penalty or the transaction can be executed without a depreciation of the assets’ value.

Digital assets accounting and tax: Potential opportunities for alignment, challenges of divergence

Controls, governance risk, and compliance

Risk and controls are at the very foundation of any investment project in digital assets. Let’s quickly review the main areas that should be on the radar.

Conclusion: Monitoring regulatory and standard-setting changes while realigning for success

As market events and ongoing discussions about regulation and standard setting animate the digital asset ecosystem, it’s imperative that corporations investing in these digital assets devote the resources, time, and attention to monitoring the evolving situation. At the same time, they should continue to engage in the necessary transformation of their organization so that, when new regulations and standards are announced, they can pivot to understand their implications and implement their rules.

Any sizable investment in digital assets presents more than just technical or regulatory issues related to treasury, accounting, reporting, tax, and controls. It also involves a significant cultural realignment—internal and external— among the many different groups and departments, including but not limited to the board of directors, the audit committee, risk, corporate reporting, finance, tax, internal audit, operations, controls, technology, and investor relations. Since many of these departments interact with external parties, such as the external auditor, tax, and legal counsel, etc., it is vital that there be a corresponding realignment in thinking when dealing with these external groups.

What does that realignment entail? Typically, the various functions and departments of a company establish procedures and assumptions for collaborating across and outside the organization based on normal-course, well-understood transactions. The terrain of digital assets is still a new frontier of possibilities, so it requires that each corporate department and its external party rethink the application of the rules and policies of its core competency and align with current and anticipated rules and standards when they are announced. Few of the norms associated with legacy investments in securities, fiat currency, or treasuries may apply. Once each group gains a level of comfort with the application of the evolving rules and standards to digital assets, they then should actively listen to one another, gain an understanding of the sensitivities, evaluate any operational or technical dependencies, and, finally, rethink how they collaborate and tackle challenges together.

Many more operating companies are beginning to evaluate the potential benefits of investing in digital assets like bitcoin. And as their cumulative experience grows and sparks further interest, the more likely strategic investments in digital assets are to become more routine realities. That said, companies should have the right risk measures in place, as well as the right risk tolerance levels, for it to be worthwhile to pursue this type of investment. The realities facing operating companies interested in investing in such assets are complex and ever in flux. But they can be navigable with the right level of commitment from all departments and external parties. And with appropriate attention to issues of rules and standards as well as process, procedures, and risk all along the decision spectrum, digital assets can offer innovative, bold, and dynamic alternatives to traditional investments.


1 Microstrategy Inc., “MicroStrategy announces over $1B in total bitcoin purchases in 2020,” press release, December 21, 2020.
2 That assumes that the company is not required to apply specialized industry guidance, such as the guidance in ASC 946 Financial Services – Investment Companies.
3 International Accounting Standards Board (IASB), Third Agenda Consultation Feedback Statement, July 2022; IASB, IASB Update, April 2022.
House Financial Services Committee, “Testimony of Mr. John J. Ray III, CEO, FTX Debtors,” December 13, 2022.

This article contains general information only and Deloitte is not, by means of this article, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This article is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser.

Deloitte shall not be responsible for any loss sustained by any person who relies on this article.

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