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KPMG Canada buys Bitcoin and Ethereum, adding crypto to its corporate treasury

Kitco News

(Kitco News) KPMG in Canada just made its first direct crypto investment, adding Bitcoin and Ethereum to its corporate balance sheet.

The diversification into crypto reflects KPMG's view that digital assets adoption will continue to grow and become a more traditional part of the asset mix, said Benjie Thomas, Canadian managing partner, Advisory Services, KPMG in Canada.

"Cryptoassets are a maturing asset class," said Thomas. "Investors such as hedge funds and family offices to large insurers and pension funds are increasingly gaining exposure to cryptoassets, and traditional financial services such as banks, financial advisors and brokerages are exploring offering products and services involving cryptoassets."

The transaction was carried out through Gemini Trust Company. And it comes after KPMG set up a governance committee tasked with providing oversight and approving the treasury allocation.

Before making the allocation, the committee looked at risks, including a review of regulatory, reputational, and custodial risks.

"The allocation includes Bitcoin (BTC) and Ethereum (ETH), as well as carbon offsets to maintain a net-zero carbon transaction to deliver on the firm's stated environmental, social and governance (ESG) commitments," KPMG's release said.

The crypto investment seems just the beginning of KPMG's involvement with digital assets.

"The cryptoasset industry continues to grow and mature and it needs to be considered by financial services and institutional investors," said Kareem Sadek, advisory partner, cryptoassets and blockchain services co-leader, KPMG in Canada. "We've invested in a strong cryptoassets practice and we will continue to enhance and build on our capabilities across Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs) and the Metaverse, to name a few. We expect to see a lot of growth in these areas in the years to come."

This move makes KPMG one of the most well-known mainstream firms to hold crypto on its balance sheet.

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Bitcoin and Ethereum saw major price drops in January as a broader selloff within the U.S. stock market directly impacted the crypto space. However, as stocks began to recover, so did the two world's largest cryptocurrencies. At the time of writing, Bitcoin was trading at $42,983.80 and Ethereum was at $3,053.37. 

And despite a 50% drop from November's record highs, many analysts are projecting for both Bitcoin and Ethereum to recover this year as adoption continues to surge.

Wells Fargo said metrics that measure bitcoin usage and adoption point to a strong trend towards digitization.

"There are many metrics used to analyze bitcoin usage and adoption, but one of the more important ones is Lightning Network Capacity," said Wells Fargo senior global alternative investment strategist Justin Lenarcic. "Lighting Network Capacity continues to trend higher, and at the time of this writing was 3,351 bitcoin. This means at current bitcoin prices, users can send and receive nearly $123 million over the network … It is nearly four times more than this time last year and nearly two times the capacity just six months ago. Adoption and utilization is still strong, which bodes well for the long-term rationalization of cryptocurrencies."

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