Fidelity VP Challenges Corporations: Rethink Risk, Consider Bitcoin
Chris Kuiper, Vice President of Research at Fidelity Digital Assets, recently challenged corporations to reconsider their approach to risk, capital allocation, and long-term financial health at Strategy World 2025. He argued that traditional views on risk and safe havens may no longer hold true in today's investment landscape.
Kuiper pointed out that volatility, often perceived as risk, is not the real threat facing balance sheets. Instead, he highlighted permanent capital loss and inflation as the primary concerns. He noted that even traditional safe havens like U.S. Treasury bonds have suffered negative real returns over time.
To illustrate this, Kuiper compared the performance of investment-grade bonds, which returned just 1.3% nominally, to bitcoin price's growth over the same period. Bitcoin, on the other hand, has delivered a staggering 79% compound annual growth rate (CAGR) over the last decade and 65% over the past five years. Kuiper also emphasized that Bitcoin has outperformed every major asset class over the last ten years.
Kuiper suggested that companies could improve their risk management and long-term financial health by allocating a portion of their capital reserves to Bitcoin. He cited examples of companies like Tesla, MicroStrategy, and Square (Block Inc.) that have successfully done so. To address Bitcoin's volatility, Kuiper proposed two practical strategies: position sizing and long-term thinking. He also stressed the importance of return on invested capital (ROIC) over headline earnings and the inefficiency of sitting on cash.
Kuiper's insights challenge corporations to reevaluate their risk management strategies. He demonstrated that while Bitcoin's volatility may pose short-term challenges, its long-term performance and potential to hedge against inflation and currency debasement make it a compelling option for corporate treasuries. By allocating a small portion of their reserves to Bitcoin, companies can significantly improve their risk-adjusted returns while limiting drawdown exposure.
