The first domino of the bull run has fallen. American companies will soon be able to count their bitcoin reserves at their fair value.
The FASB endorses bitcoin
Good news for companies like Tesla that hold bitcoin in reserve. Long-awaited new accounting rules have been unanimously approved by the FASB (Financial Accounting Standards Board).
Companies holding bitcoins will soon be able to declare their holdings at their fair value (“Fair value accounting”). Explanation.
Bitcoin is currently considered by accountants to be an intangible asset. This category includes things like registered trademarks and even patents. That is to say, things that are rarely exchanged and whose value rarely fluctuates.
Unfortunately, if the depreciation of bitcoins must be recorded, this is not the case for their appreciation… Capital losses are recorded, but not capital gains!
The added value can only be recorded after the sale of the bitcoins. This is a problem for companies like Microstrategy who have no intention of selling it. Hence the letter from MicroStrategy’s CFO to the FASB last May. Andrew Kang wrote there:
“Fair value accounting would allow us to provide investors with a more relevant view of our financial situation and the economic value of our bitcoin holdings. This would facilitate investors’ ability to make informed investment decisions. »
Microstrategy CEO Michael Saylor was delighted to have won the case:
“Bitcoin will soon be accounted for at fair value. This update to FASB accounting rules removes a major barrier to corporate adoption of bitcoin as a treasury asset. »
We must therefore welcome the Financial Accounting Standards Board whose rules will come into force in December 2024. Multinationals will, however, have the possibility of applying them earlier, the FASB agreed.
Domino day
The first domino that we anticipated in July has fallen. Next on the list is the halving scheduled for May 2024. From that date, the bitcoin supply will halve.
3,125 bitcoins will be created every ten minutes against 6.25 bitcoins before. Anticipation of this supply shock has always triggered bullish rallies in the past:
More dominoes need to fall for the planets to align in favor of a new all-time high above $100,000. The first of these is the famous ETF.
It’s no longer really a question of if, but when this ETF will see the light of day. The twist in Grayscale’s lawsuit against the SEC could speed things up. Especially since the giant BlackRock has entered the dance.
Finally, let us recall Max Keiser’s famous maxim: “You can’t tap a ponzi”. We only need to look at the central bank of Japan to know what the future holds for us on both sides of the Atlantic.
The BoJ holds more than 53% of the public debt (which represents 263% of GDP). The FED for its part holds 15%. So there is room…
The figures in this graph do not correspond to those given above because they include other assets (shares, real estate debt, debt securities of multinationals, etc.) also purchased using Quantitative Easing.
If the United States enters into recession in the coming months, some imagine that the Fed could bring out its printing press again.
Others will say that the current rise in the price of a barrel makes this unlikely. But nothing stops the Fed from printing while having its rates high. Especially since Saudi Arabia is shedding US debt…
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