Fidelity’s investment case for companies

Chris Kuiper, Vice President of Research at Fidelity Digital Assets, has issued a clear warning: companies that delay in adopting Bitcoin risk destroying financial value in the long term. In the current financial landscape, Bitcoin emerges as an exceptional investment asset, capable of outperforming almost all other traditional categories over the last ten years. This thesis has been clearly illustrated by Kuiper. Bitcoin as a strategic reserve: data and performance comparison During the conference Strategy World 2025, Chris Kuiper highlighted that, over the last decade, Bitcoin has recorded an average annual compound return ( CAGR ) of 79%, while in the last five years this return has settled at 65%. These numbers are well beyond the performances offered by traditional and safer instruments, such as government bonds and investment-grade bonds, which in comparison have returned a modest 1.3% nominal in the same period. The crucial point of Kuiper’s speech concerns the traditional perception of risk in businesses. Many companies tend to consider volatility as synonymous with risk. However, Kuiper clarifies that volatility is not the real danger, but rather the permanent loss of capital . In this regard, he highlighted the negative impact of inflation and the devaluation of fiat currencies, factors that erode the real value of corporate balance sheets. Furthermore, even the so-called “safe” havens, such as American government bonds, show negative real yields in the long term, compromising the financial solidity of companies that rely exclusively on such instruments to store liquidity. Strategies to manage Bitcoin volatility in the company Kuiper acknowledges that the high volatility of Bitcoin represents a real concern for businesses. However, he suggests two simple yet effective strategies: Position sizing : the investment in Bitcoin should not be all-encompassing, but can be limited to a share between 1% and 5% of the total capital allocation. Long-term vision : holding Bitcoin for extended periods allows for reducing the impact of short-term fluctuations, transforming it into a stable asset over time. These measures allow for an improvement in the risk-adjusted return of the corporate portfolio, while simultaneously limiting exposure to potential sudden declines. The role of unproductive capital and the efficiency of the corporate balance sheet A significant part of Kuiper’s intervention concerns the management of inactive capital. Companies often hold large amounts of cash or low-yield investments, which penalize the Return on Invested Capital (ROIC) — a fundamental indicator for measuring the efficiency of financial management and the ability to generate value. For example, Kuiper highlighted how Microsoft’s ROIC drastically reduces from 49% to 29% if non-invested funds are also considered. This example illustrates how “idle” capital results in an economic and strategic burden. On the contrary, allocating a portion of this capital to Bitcoin can transform “dead” liquidity into a productive and potentially highly rewarding asset. Kuiper finally reminded that while companies often focus on the income statement and short-term profits, it is the balance sheet that provides a complete picture of financial health. In this context, the role of liquidity is crucial. And it is precisely here that Bitcoin can offer significant added value, changing the nature of cash on hand from a simple liability to a potential long-term investment. The key question for executives: opportunity versus return At the conclusion of his presentation, Kuiper posed an important question to the company executives: “What is your set of opportunities and do you believe that these can outperform Bitcoin?” This reflection stimulates a direct comparison between traditional financial strategy and the innovative one, highlighting the growing difficulty in justifying the maintenance of large cash reserves without significant yield. The answer to this question, according to Kuiper, appears increasingly clear: Bitcoin represents an opportunity not to be underestimated to safeguard and enhance enterprise value. Prospects for companies and the future of digital investments The analysis presented by Fidelity shows how Bitcoin is no longer an exclusively speculative phenomenon , but a real strategic opportunity for companies attentive to the financial future. For those managing large budgets, the challenge lies in adapting mindset and asset allocation to the new market dynamics. However, it is not specified how different types of companies will be able to integrate Bitcoin into their assets, nor which regulatory and tax instruments will accompany this transformation. For this reason, it is desirable that companies continue to study and delve into the topic, considering specialized consultations and gradual investment strategies. Only in this way can they avoid falling behind and fully exploit the potential for return and protection that Bitcoin offers against inflation and capital erosion. Bitcoin is thus confirmed as a concrete opportunity for companies, capable of revolutionizing the approach to financial management. Companies that can integrate this resource into their portfolios could significantly improve their solidity and ability to generate value in the long term. The question remains open: will companies be able to seize this challenge or will they continue to lose ground in the dynamics of modern investment? Source: https://en.cryptonomist.ch/2025/05/08/bitcoin-and-businesses-fidelitys-investment-case-for-companies/