Bitcoin (BTC) and cryptocurrencies may soon see another massive wave of adoption among U.S.-based businesses following new accounting rule changes that will allow companies to more accurately reflect the value of their cryptocurrency holdings.
Cory Klippsten, CEO of Swan Bitcoin, a Bitcoin-only exchange, told Cointelegraph that both MicroStrategy and Bitcoin-holding companies like Tesla have been required to report impairments in their holdings, which “now more accurately reflects the actual value of Bitcoin investments.” “You can do it,” he said.
“This change is important for companies primarily focused on Bitcoin, as well as a broad range of companies to encourage more mainstream corporate adoption.”
New Financial Accounting Standards Board (FASB) rules announced on December 13, which take effect in December 2024, allow companies to record the assets they hold when they are held, thereby keeping the estimated market value of the cryptocurrencies they hold on their books. Display accurately. With benefit.
Previously, cryptocurrency held by a company could only be damaged if the value of the cryptocurrency on the books, which could not increase until sold, decreased even if the value increased while it was held.
Klippsten added that businesses can now use Bitcoin as a “strategic financial asset.” This is because it allows reporting on value gains and losses, a feature that can help drive adoption.
Matrixport Research Director and Crypto Titans Author Markus Thielen told Cointelegraph that the rule change “highlights the distinct corporate demand” to integrate cryptocurrencies into company accounting.
Related: BlackRock revises spot Bitcoin ETF to make it more accessible to banks.
“Digital assets are becoming an increasingly important component of financial statements,” Thielen said. He added that businesses will now have more confidence when assessing the value of their cryptocurrency holdings.
“This represents firm confirmation that digital assets are firmly established in the financial landscape.”
Others were also intrigued by the rule change. David Marcus, co-founder of Facebook’s bin stablecoin project Diem, posted on I did. balance sheet.”
You might think this is a small accounting change that doesn’t mean much. It’s actually a big deal. This removes a major obstacle that prevents businesses from retaining. #Bitcoin On the balance sheet. 2024 will be a groundbreaking year. $BTC. https://t.co/gV0KRISt8B
— David Marcus (@davidmarcus) December 13, 2023
In a September 6 note after the FASB approved the rules, Mark Palmer, senior equity research analyst at Berenberg Capital, said companies holding cryptocurrencies “can eliminate poor optics created by impairment losses under the rules established by the FASB.” “He said. .”
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