Guest Contribution From By: ICONOMI
In the latest instalment of our guest series featuring content from cryptocurrency experts, ICONOMI, we take a direct look at how cryptocurrency can be a powerful tool for your business. As a business, cryptocurrency may seem like a bit of a left-field decision, but that’s not the reality. Have a read of the case study below to find out more about how your business can use cryptocurrency as a way of fighting against the effect that inflation can have on savings.
How a UK Construction Business Uses Cryptocurrency To Shield Cash Reserves from Inflation
Case Study Overview:
- Company: UK-Based Construction Firm
- Industry: Construction (Energy, Commercial, Domestic Sectors)
- Challenge: Safeguarding capital against persistent high inflation
- Solution: Strategic investment in a diversified cryptocurrency portfolio via ICONOMI
- Results: Positive returns and a strengthened cash reserve strategy against inflationary pressures
Setting The Scene
A small construction company in the UK, actively involved in energy, commercial, and domestic construction projects, noticed a pressing need to protect its surplus cash reserves from inflation’s eroding effects. Like many firms today, this company faced economic uncertainties, prompting it to explore alternatives to traditional treasury solutions. Amid rising inflation, and fiat currency devaluation, which continues to impact the construction sector and broader business landscape, cryptocurrencies emerged as a potential option to diversify their financial strategy and protect their assets.
The Challenge Of Inflation
The company faced a dilemma common among many businesses today: traditional treasury management options, such as high-interest savings accounts and cash-equivalent investments, were not providing adequate insulation against inflation. Adding to the challenge, there was no straightforward or secure route to introduce corporate funds into cryptocurrency markets. Amidst these limitations, the company recognized the need to explore alternative solutions that could potentially provide better long-term returns and act as a buffer against ongoing inflation.
Cryptocurrency And Your Business: A Solution
Following extensive research and networking on LinkedIn, the construction company connected with ICONOMI, a digital asset management platform tailored for both institutional and individual investors. After conducting thorough due diligence, including rigorous credit checks and security assessments, the company selected ICONOMI due to its accessible yet robust platform, which offered both diversified and single-asset crypto investment options.
They began by investing 10% of their cash reserves into a mix of low-risk crypto portfolios and individual assets like Bitcoin. Over the past year, they gradually increased their allocation to digital assets, leveraging ICONOMI’s intuitive user interface and expert-curated portfolios to make data-driven investment decisions.
Business & Cryptocurrencies Trends
Recent data indicates that corporations are increasingly integrating Bitcoin and cryptocurrencies into their cash management strategies, especially to fight inflation. According to reports, the adoption rate has grown significantly, with a 20% increase in corporate cryptocurrency holdings year-over-year.
Companies like Tesla, MicroStrategy, and Square pioneered this trend, demonstrating that cryptocurrencies can serve as a hedge against inflation and currency devaluation. Recent findings from Deloitte and PwC indicate that over 50% of financial executives are considering, or already holding, crypto assets as part of their treasury strategy to mitigate inflation risks, with Bitcoin being the top choice due to its proven resilience and institutional adoption.
Since the construction company’s initial investment roughly 1 year ago, it has enjoyed positive outcomes despite the inherent volatility of the crypto market. The company reported promising returns during the market research and outperformed any equity or traditional financial market product. Their diversified portfolio on ICONOMI allowed them to stay agile and adjust to market conditions effectively. ICONOMI’s extensive asset selection has enabled them to balance risk and opportunity, achieving a meaningful hedge against inflation.
Here’s what the company had to say:
“The platform is easy to use and has worked great for us so far; we can hold a portfolio and also invest more in our favorite assets. Since we started investing, we have had great results. We know that investments can go down as well as up, but there is a great choice of the latest assets on the platform.”
– UK Construction Company
Conclusion: Using Crypto To Leverage Inflation
The decision by this construction company to incorporate cryptocurrency into its business treasury showcases how businesses can leverage digital assets to navigate inflation and economic uncertainties.
With ICONOMI’s secure, user-friendly platform, the company has been able to diversify effectively, protecting against inflation and currency devaluation. This case is a valuable example of how traditional businesses can adopt new financial strategies to support growth and resilience.
Learn more about ICONOMI business accounts here.
Disclaimer: The content of this article has been provided by ICONOMI and reflects their views and insights. Nordens Chartered Accountants does not provide financial or investment advice, and this article should not be interpreted as such. We are not endorsing or recommending any specific actions or decisions based on the information provided. For personalised advice or to assess the suitability of any financial or investment strategy, we recommend consulting with a qualified financial professional.
