Crypto-curious corporations struggle to find right recipe

‘WATCH THE JOCKEYING’ 

Microsoft typifies the emerging pattern of big companies dabbling in crypto.

The first rule: keep it at arm’s length from the core business.

The tech giant has stressed that shareholders will not be exposed to the ups and downs of crypto prices.

PayPal and Apple, two other crypto-curious corporations, have made similar pledges to their shareholders.

To keep crypto off its balance sheet, Microsoft partnered with a firm called Bakkt that allows clients to convert crypto assets into products like gift cards for Xbox, or charge their Starbucks payment card.

Bakkt, which has received investments from Microsoft’s venture capital fund M12, went public last year and a flurry of big partnership announcements with the likes of Mastercard sent its share price soaring.

But then came the nose-dive as it reported widening losses and its business came under scrutiny.

The firm had said it expected to have nine million customers by the end of 2021, yet its executives gave a figure of 1.7 million transacting accounts late last year.

PayPal, meanwhile, garnered a lot of publicity for a “checkout with crypto” feature launched in the US and UK last year.

PayPal’s system converts users’ cryptoassets into money before passing on payment to the vendors.

But it is unclear how popular any of these services are – none of these companies responded to AFP requests for details of the uptake.

Market watchers say it is too early to tell how these forays into crypto will play out.

“My view is to not get too excited yet but just watch the jockeying,” said analyst John Freeman of CFRA research, accepting the hot air made it difficult to predict what would happen next.