Despite the meteoric rise of Bitcoin last year — and its continuing reign as the world’s largest cryptocurrency by market cap — a new study commissioned by Citrix makes the discovery that of the 50% of large British businesses that have a stockpile of digital currency, just 7% are investing in Bitcoin alone. Instead, and rather intriguingly, 93% admit they are being shrewd and spreading the risk by investing in a diverse portfolio of cryptocurrencies. Just over half (54%) have bought Litecoin, for example, and a significant proportion of these organisations have also invested in alternatives, such as Ethereum (43%), Ethereum Classic (%), Ripple (33%), and Dash (29%).
The study, which we carried out in partnership with One Poll, surveying 750 IT decision makers within large UK businesses of 250 or more, also found that responding businesses have on average 24 Bitcoins in their possession, which at the time of writing equates to a value of around £145,000. Bitcoin skyrocketed last year and hit an all-time high of £13,991.86 ($19,535.70) on 17 December, and our research reveals that 57% of the British businesses who are hoarding Bitcoin, sold off some of their supply while prices were so inflated, making a satisfying profit. The value of Bitcoin has since fallen dramatically (by more than 50% since the beginning of 2018) and been in constant fluctuation, however a resurgence appears to be currently underway and our study shows that a further 38% of these responding businesses are considering making a sale. Just 5% have no current intention to cash-in on their Bitcoins.
But the security threat of cryptocurrency prevails, and we already know that some large UK businesses are stockpiling Bitcoin in case of a ransomware attack. However, our survey reveals this behaviour may have been over-hyped with just 4% claiming this motive to be true. Despite this, 64% of responding companies keeping a ready supply of Bitcoin say that its inflated price has led cybercriminals to target their Bitcoin stockpile, and 31% believe a stockpile of digital currency might make the business a target for cybercriminals. But UK businesses are overall savvy to the risks associated with stockpiling Bitcoin, and only 5% of responding companies in possession of the digital currency have not taken any steps to protect their reserves.
It’s a fact that cryptocurrency investors face an increasing array of instability and risk, and we see new scams cropping up every day. Of those that have made changes to secure their Bitcoin assets, 52% have used specific back-up procedures. Other popular security measures include: using cold storage/offline storage (36%), moving to multiple wallets (36%), using a dedicated/hardened computer (35%) and using dual control so multiple people are required to access the cryptocurrency (22%). However, at Citrix we know that very often, people are the weakest link in the security chain, and 18% of responding businesses say they worry that their hoard of digital currency might put them at risk of insider theft.
Looking ahead, while cryptocurrencies face increasing regulatory threats and continually fluctuating prices, it’s intriguing to see how inspired businesses are for its potential usage. Within survey findings, 40% say they plan to use the currencies to pay providers, while 32% are aiming to pay employees in a digital currency. Additional plans include using cryptocurrencies together with smart contracts or other blockchain technologies (27%), as part of fundraising (21%) and to pay for training, R&D or other demonstrational activities (17%).
Industry forecasts for the cryptocurrency market this year are huge, and some experts say it could hit the $1 trillion mark with Bitcoin surging to $50,000, yet UK businesses remain slightly sceptical. According to our study, 35% are concerned digital currencies might crash, and 34% admit that fluctuating prices are discouraging them from stockpiling further. A further 18% are concerned that their business will not be able to cash the cryptocurrency in when required. Time will tell, but above all, it’s enlightening to see how an increasing number of UK businesses are embracing the myriad potentials of cryptocurrencies and focusing on building a diverse portfolio of investments. There’s little doubt that 2018 is set to be a clearly defining year.