Endless Summer for BTC…as the Good Vibrations Continue.
Biggest News all Year for bitcoin. Period.
FASB published results from its comment period, indicating plans to implement the long awaited accounting change by 2025, making it more favorable for corporations to hold BTC.
Two major wins
1. Tangible from intangible asset recognition.
2. Fair Value from impaired asset valuation. This allows the corporation's balance sheet to enjoy the upside in price, which impaired treatment did NOT allow.
as it relates to WHEN it will be implemented, the report reflected preference from comment letter respondents...
"...that the transition time should be minimal, with 16 of those respondents specifically recommending an effective date that is no later than 1 year after the issuance of a final Update..."
Link to FASB release here;
Great news in a year when the 'good-news bar' has been set high, including...
1. Institutional demand: The deluge of spot BTC issuers in June (Blackrock, Feudality, Invesco, Ark) from managers with over $25 Trillion in AUM.
2. TradFi support for Coinbase: Many of these TradFi investors in turn showed unbridled support for Coinbase as their Surveillance Sharing Agreement (SSA) partner.
We note that Blackrock launched its ETF effort just two days after the SEC sued Coinbase on June 6th. We view the proximity of Blackrock's stealth Delaware filing on June 8th, ahead of its more public June 15th ETF filing as more than tacit support for Coinbase.
3. SEC loses court battle to Block a Spot BTC ETF . Last week's U.S. Appeals Court ruling denied the SEC's 'arbitrary and capricious' approach to denying a spot BTC ETF.
And then Today's FASB announcement.
Why is today's announcement from the U.S. Financial Accounting Standards Board (FASB) potentially MORE impactful than the previous three?
Because corporations are a whole new category of buyer and changing the accounting treatment of bitcoin (BTC) to a tangible asset carried at fair value from a 'long lived intangible asset' carried as an impaired asset makes a BTC investment easier to carry, instead of punitive.
This accounting change eliminates the effective price cap placed on BTC, making it more attractive for all corporations, now carried at market value, instead of its lowest mark.
Potential implications for the SEC. Per the FASB website...
"The FASB is recognized by the U.S. Securities and Exchange Commission as the designated accounting standard setter for public companies."
So FASB has upgraded BTC to the more standard and favorable 'fair value' treatment...the next question is WHEN will the SEC treat BTC in a standard way by allowing a spot BTC ETF in the U.S.
For more detail and context on the topic, I suggest you scroll through the below thread from our friend @jameslavish on Twitter. He has been following and writing about this specific topic for a while.