Please note: this article is not business or financial advice, do your own research.

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New Zealand is the homeland of small and medium-sized enterprises (SMEs) where cashflow and savings are often a major challenge. 

It is important to understand what a Bitcoin treasury can do for your business to strengthen your financial resilience and give a competitive advantage.

Adopting a Bitcoin-thinking approach more generally can also have a deeper impact on your business strategy and the decisions you make.

The Cashflow Challenge

New Zealand’s economy is built upon SMEs but these businesses can face significant cashflow pressures. After accounting for expenses and drawings often little remains to be saved for the company. Many businesses reinvest directly into operations, research and development, or growth initiatives, while others see funds absorbed by day-to-day costs.

Larger businesses and corporations may have optics over where money is going and dedicated financial teams, but for the classic kiwi business it is often a case that the owners are directly managing the finances and are "too busy" to take a step back and look at the bigger picture.

This can leave little room for building financial buffers, which can be a problem when unexpected expenses arise or the market changes - a reality that is especially pressing as NZ faces economic uncertainty.

What is a Treasury?

A company treasury is essentially the financial hub of a business, responsible for overseeing and managing the company’s monetary resources. This includes activities like cash management, investment planning, and ensuring there is sufficient liquidity to meet the business’s obligations. 

Traditionally treasuries focus on preserving capital while generating returns through investments, typically in low-risk assets such as bonds or term deposits. 

But the reality for most kiwi businesses is that the "treasury" is a quick glance at Xero and the bank balance to make sure things are still humming and that invoices have been paid.

Beyond managing immediate finances a treasury can be much more and can help play a strategic role in long-term financial planning, helping businesses weather economic uncertainties and seize new opportunities.

Why Consider a Bitcoin Treasury?

A Bitcoin treasury acts as a savings mechanism - a place to store surplus revenue for the long term.

‍Unlike term deposits or keeping cash in the bank which currently offer minimal returns that don’t even beat inflation, Bitcoin provides a potential hedge against inflation and fosters a savings-oriented mindset. By saving in Bitcoin it also removes the risk of debasement that comes with holding on to New Zealand Dollars.

Businesses can begin small, setting aside modest amounts weekly with a strategy to pipe earnings regularly into Bitcoin with the goal of building up a “Bitcoin war chest” that can act as both a psychological and financial safety net.

The annualised return over the past six years (2019-2024) for Bitcoin is approximately 65% (in USD), though it's important to note that while Bitcoin has delivered high returns, it has also experienced significant volatility and drawdowns during this period. Even if it comes with some price-discovery volatility it is important to think of Bitcoin not as a speculative investment, but as a robust hard-money savings mechanism in the age of easy money. Understanding the underlying properties of Bitcoin and why it is continuing to increase in value is important to inform your strategy.

With a Bitcoin Treasury the guiding question for a business can simply be boiled down to: “Are there more satoshis (sats) in the wallet today than yesterday?” which encourages strategic financial planning and helps develop long-term savings habits.

The Power of a "Set and Forget" Strategy

A "Dollar Cost Average" (DCA) strategy can be ideal for your Bitcoin treasury. As business owners we are all busy with operations. Buying Bitcoin regularly and automatically means you don't have to think about the strategy actively on a day to day basis. It also means you catch a good average price for Bitcoin and before you know it you may have accumulated a significant amount which can be valuable as an asset on your balance sheet, especially for businesses with minimal assets or collateral who are seeking loans for growth.

Getting Started with a Bitcoin Treasury

1. Setup an Account: Register your business with a Bitcoin brokerage platforms such as LightningPay NZ and verify your details.
2. Integrate Payment Options: Use tools like Akahu open banking integration or POLI Pay for seamless transactions.
3. Setup a Bitcoin Wallet: Setup a Bitcoin wallet for receiving your Bitcoin. There are many options but attributes to consider are: Is it Bitcoin Only? Is it open source? Is it self-custodial? Some good wallet options include Phoenix or Blue Wallet.‍
4. Establish Regular Savings: Implement a regular dollar-cost-averaging strategy to purchase Bitcoin (e.g. weekly buys of a certain amount).‍
5. Cold Storage for Security: Consolidate Bitcoin holdings at a reasonable size into a secure cold storage wallet. Ensure seed phrases are backed up securely, following best practices for privacy and protection.

Considerations for Businesses

• Volatility: Bitcoin’s value can fluctuate significantly. A holding period of at least four years is recommended to mitigate short-term volatility.
• Holding Strategy: Bitcoin is a pristine asset and should be considered as savings first and foremost and not as a speculative trade.
• Transaction Fees: Sometimes Bitcoin transaction fees can be high on chain. Using the Bitcoin Lightning Network can help alleviate this.
• Tax Compliance: In New Zealand, Bitcoin is classified as intangible, non-depreciating property and is taxed based on its market value. There are no issues with holding Bitcoin as an asset on your company balance sheet. Ensure purchase history is well-documented and seek advice from your accountant if needed. Useful resources include IRD’s cryptoassets guidance and insights from Taxoshi.
• Accounting Strategy: Ask your your accountant about the best way to account for your Bitcoin holdings. New Zealand Accounting practices may differ from a lot of US-centric information.

Building Resilience Through Savings

A Bitcoin treasury isn’t just about financial security; it’s about shifting mindsets. By prioritising savings, businesses can reduce stress, improve strategic decision-making, and ensure greater clarity around pricing, objectives, and long-term goals.

Starting small with regular contributions builds discipline and lays the foundation for financial resilience in an increasingly uncertain economic landscape.

It is my opinion and experience that if you think in terms of saving Bitcoin, you will make more prudent business decisions, be more careful with cashflow, and naturally develop a longer-term approach to your business in general.

Learn More

Listen to this episode with Aness Kattan of Structural Engineers NZ to hear a discussion about their Bitcoin treasury strategy.

Got a Question?

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