Can a business have a crypto wallet?
Businesses that can trade in and invest in cryptocurrencies should decide whether a crypto wallet is necessary or whether a custodial solution is necessary. Technically, you don’t have to keep your coins in cold storage or download a hot wallet program.
How do businesses hold crypto?
A business manager should decide on the best method for handling cryptocurrencies based on their primary purpose in the company’s operations. Security is probably the main consideration, followed by flexibility and ease of use. Charges for crypto banking and storage should not be the main criterion. The three main options are:
- Hot wallets – suitable for companies that will need to handle high volumes of crypto transactions
- Cold wallets – for storage of longer-term and more stable investments in digital currencies
- Custodial accounts – if the level of security is a prime concern.
Which is the best wallet to store crypto?
Choosing the right wallet is very much a matter of crypto and digital currencies’ purpose in your business operations. After considering the options we have described in all the preceding sections, talk to us here at GBO to get the latest and most relevant advice that will suit your own company’s needs.
Why should a company invest in crypto currency?
Any investment decision needs to balance three main considerations: security, rate of return, and liquidity. A professional investment manager will have to take into account when committing his assets that:
- Cash and short-term bank deposits have good liquidity, total security, and negative rate of return in periods of inflation
- Government bonds have good security, low liquidity and yields lagging behind
- Listed equities have low protection (as seen when markets go into widespread fall), limited liquidity and low or zero rates of return.
In comparing traditional investments like these with cryptocurrencies, a manager must also consider the taxation levels on investment yields and other external factors. Crypto currencies do not pay dividends or interest, and trading in cryptocurrencies takes place outside of conventional banking channels.