Bitcoin (BTC) and cryptocurrencies could soon see another wave of mass adoption among U.S.-based companies following a new accounting rule change that will allow companies to more accurately reflect the value of their cryptocurrency holdings.
Cory Klippsten, the CEO of pure-play Bitcoin exchange Swan Bitcoin, told Cointelegraph that Bitcoin-holding companies like MicroStrategy and Tesla, both of which had to report impairments in their holdings, “can now more accurately reflect the true value of their Bitcoin investments.”
“This change is critical for a wide range of businesses, not just those primarily focused on Bitcoin, and encourages greater corporate adoption.”
The new Financial Accounting Standards Board (FASB) rules, published on December 13 and taking effect in December 2024, require that the estimated market value of cryptocurrencies held by companies be accurately represented in the companies' books of accounts by giving them allowing them to record when they hold assets at a profit.
Previously, cryptocurrencies held by companies were only impaired when the value of the cryptocurrencies on the books decreased, which could not be increased until sold, even if their value increased while in storage.
Klippsten added that companies could now use Bitcoin as a “strategic financial asset” as they could report on its gains and losses in value, a feature that could help drive adoption.
Markus Thielen, head of Matrixport research and author of Crypto Titans, told Cointelegraph that the rule change “underlines the noticeable demand from companies” to include cryptocurrencies in a company’s accounting.
Related: BlackRock is revamping spot Bitcoin ETF to provide easier access for banks
“Digital assets are increasingly becoming a crucial part of financial reports,” Thielen said, adding that companies will now have more confidence in valuing their crypto holdings.
“This is a clear confirmation that digital assets have firmly established themselves in the financial landscape.”
Others were also enthusiastic about the rule change. David Marcus, co-founder of Facebook's binned stablecoin project Diem, wrote on to keep your account.” Balance sheet.”
You may think that this is a small accounting change that doesn't mean much. It's actually a big deal. This removes a major obstacle standing in the way of companies keeping #Bitcoin on their balance sheet. 2024 will be a milestone for $BTC. https://t.co/gV0KRISt8B
— David Marcus (@davidmarcus) December 13, 2023
In a September 6 note following the FASB's approval of the rules, Mark Palmer, senior equity research analyst at Berenberg Capital, said crypto holding companies could “eliminate the bad optics created by impairment losses under the rules that the FASB introduced.” .”
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