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Michael Saylor joyous at FASB decision to review crypto accounting rules

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Michael Saylor joyous at FASB decision to review crypto accounting rules

Bitcoin › Regulation

FASB previous guidelines provide that companies should report digital assets and commodities as “intangible assets” on their balance sheets.

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2 min read

Updated: May 12, 2022 at 1:19 pm

Cover art/illustration via CryptoSlate

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The Chief Executive Officer of MicroStrategy and Bitcoin maximalist Michael Saylor has expressed excitement about the U.S. Financial Accounting Standards Board (FASB) decision to review rules for crypto.

Congratulations to the #Bitcoin community. This morning, by unanimous vote of 7-0, the Financial Accounting Standards Board (FASB) agreed to add a project to review Accounting for Exchange-Traded Digital Assets and Commodities.

— Michael Saylor⚡️ (@saylor) May 11, 2022

FASB to review crypto accounting framework

The current FASB guidelines provide that companies should report digital assets and commodities as “intangible assets” on their balance sheets. This is because cryptocurrencies don’t meet the standard definition of “cash and cash equivalents, financial instruments, financial assets, and inventory.”

The rule means that companies like MicroStrategy, which has most of its assets in Bitcoin, can’t report crypto as a tangible asset on its balance sheet. Companies holding intangible assets must measure them using the lowest price within the reporting period.

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This reporting standard usually results in impairment losses for companies holding crypto even if the firm maintains its position. MicroStrategy recorded over $800 million in impairment losses due to the rule. In the first quarter alone, the firm reported an impairment loss of over $170 million.

Given that the FASB is yet to announce the decision officially, the review date is unclear. There’s also no assurance of the outcome.

But adopting a different set of rules that applies explicitly to cryptocurrency instead of traditional finance standards will make it easier for companies holding crypto to report more accurately.

Crypto crash leads to impairment losses for institutional holders

The performance of the crypto market in the past couple of months means that most Bitcoin holding companies have reported impairment losses on their assets.

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However, these companies, including Tesla, have not made any losses through sales and are usually still at a profit.

A good example is Townsquare Media. The New York-based company reported an impairment loss of $400,000 on its BTC in the first quarter; however, it sold its position for a $1.2 million profit on March 31.

For MicroStrategy, Bitcoin’s rapid drop in value to $28,000 means the company now has actual impairment losses. In its Q1 report, it stated that the average purchase price of its BTC holding is $30,700.

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andrew kang

MicroStrategy Will Not Dump Any Of Its Bitcoin, CFO Reveals

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MicroStrategy Will Not Dump Any Of Its Bitcoin, CFO Reveals

MicroStrategy has become a major player in the crypto realm since it began purchasing Bitcoin. Its holdings have seen it solidify its place as the public company with the largest bitcoin holdings in the world. A notable fact is that the company had bought a good chunk of its BTC during the bull rallies of 2021. So as the price of the digital asset has begun to decline, there have been speculations regarding whether MicroStrategy plans to begin dumping its BTC.

MicroStrategy Will Not Sell BTC

MicroStrategy recently appointed a new Chief Financial Officer, Andrew Kang, who so far looks to be committed to the company’s strategy. The firm has revealed in the past that it would hold its BTC for the long term and had no plans to sell. Kang has reiterated this strategy in a recent interview amid many speculations.

Related Reading | More Stress For El Salvador As Bitcoin Dips To $29,000

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Kang spoke with The Wall Street Journal where he revealed that MicroStrategy was still committed to holding its bitcoin. More importantly, the CFO explained that the company has not been facing any kind of pressure from its shareholders to actually sell off any of its BTC.

BTC starts another recovery trend | Source: BTCUSD on TradingView.com

Even with its BTC investment currently in the loss, it remains steadfast in its resolve to hold its Bitcoin. This has also been echoed by CEO Michael Saylor who took to Twitter to assure investors that MicroStrategy will not dump any of its BTC even through the bear market. Adding that the firm continues to stand with bitcoin.

BTC Will Be Worth Millions

CEO Michael Strategy is a bitcoin maximalist whose personal investment had been one of the basis for convincing the board to invest in BTC. Saylor has always been vocal about the fact that he believes the digital asset will be worth a lot of money in the future, putting it at over a million dollars.

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Saylor revealed in an interview with Yahoo Finance that he sees the pioneer digital asset touching as high as $1 million in the future. He also called it the “currency of the future” while emphasizing its superiority over other cryptocurrencies in the space.

Related Reading | Exchange Inflows Rock Bitcoin, Ethereum As Market Struggles To Recover

As for MicroStrategy, the CEO explained that when it comes to buying BTC, there is no “pricing goal”. He believes that the company will continue to buy the coin at its local peaks. Interestingly, the CEO has also said that he sees the market cap of bitcoin reaching as high as $100 trillion one day.

MicroStrategy currently holds 129,218 BTC on its balance sheet. The total entry value for all of its bitcoin is $3.97 billion. While the current value of its holdings is $3.924 billion, putting the company at about $46 million in the loss.

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Featured image from Onewsonline, chart from TradingView.com

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Microstrategy CEO Expects Bitcoin To ‘Go Into The Millions’ Despite Crypto Market Sell-Off

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Microstrategy CEO Expects Bitcoin To ‘Go Into The Millions’ Despite Crypto Market Sell-Off

Microstrategy’s CEO has predicted that bitcoin is “going to go into the millions” despite the recent cryptocurrency market sell-off. Noting that the cryptocurrency is the future of money, he said: “We are in it for the long term.”

Microstrategy Sees Bitcoin as the Future of Money

The CEO of the Nasdaq-listed software company Microstrategy, Michael Saylor, shared his bitcoin outlook Thursday in an interview with Yahoo Finance Live.

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The executive is still bullish on bitcoin despite the recent sell-off. He was asked whether there is a price target at which Microstrategy will start liquidating some of its bitcoins. The company is currently hodling 129,218 BTC.

“No,” the CEO replied, emphasizing, “we are in it for the long term.” He elaborated: “Our strategy is to buy bitcoin and hold the bitcoin, so there’s no price target. I expect we’ll be buying bitcoin at the local top forever.” He continued:

I expect bitcoin is going to go into the millions. So, we’re very patient. We think it’s the future of money.

Commenting on cryptocurrency regulation, he noted that “There’s been a deadlock in D.C. and on Capitol Hill around stablecoin regulations and around securities token regulations.” Saylor added that “the Administration wants to move faster” but “Congress is moving slower.”

The Microstrategy chief opined:

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I think this meltdown of LUNA, UST, that’s going to accelerate the regulations of stablecoins and security tokens, which will be a good thing for the industry.

“Over time, I think as people get educated and as they get more comfortable, I think we’ll recover from this drawdown,” he concluded.

Saylor has long been bullish on bitcoin. In February, he said there’s evidence of a lot more institutional adoption. In November last year, he said bitcoin will emerge as a $100 trillion asset class.

What do you think about the comments by Microstrategy’s CEO? Let us know in the comments section below.

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Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Adam Back

World Economic Forum Shares A Video About Changing Bitcoin’s Code To Proof-Of-Stake

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World Economic Forum Shares A Video About Changing Bitcoin’s Code To Proof-Of-Stake

According to a World Economic Forum (WEF) tweet, a “change in the way bitcoin is coded could almost eliminate its environmental impact.” That statement stems from a tweet the WEF published on April 26, with an accompanying video that claims “miners could stake their own bitcoins to verify transactions.”

WEF on Bitcoin’s Proof-of-Work: A ‘Basic Change in Coding” Could Eliminate ‘Most of the Network’s Energy Demands’

In recent times, there have been a lot of arguments about the energy consumption used by cryptocurrency miners and how it impacts the global environment. In recent times, politicians and regulators have been targeting the mining industry. Additionally, the environmental global campaigning network Greenpeace, with the help of Ripple Labs co-founder Chris Larsen, started a campaign to get Bitcoin’s code changed so it will be friendlier to the environment. The web portal cleanupbitcoin.com states:

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You’ve heard Bitcoin fuels the climate crisis, but did you know a software code change could clean it up.

The World Economic Forum (WEF) has shown it agrees with the Greenpeace campaign “Change the Code, Not the Climate.” On April 26, the WEF tweeted about the possibility of Bitcoin changing to a proof-of-stake (PoS) network. The same WEF that has been promoting the ‘Great Reset’ agenda, shared an accompanying video clip that claims “miners could stake their own bitcoins to verify transactions.”

A simple “basic change in coding” could eliminate “most of the network’s energy demands at a stroke,” the video says. WEF’s video mentions the Greenpeace-led ‘Change the Code’ effort and the campaigners who believe the controversial idea is possible.

Clips from the WEF’s latest video about changing Bitcoin’s codebase.

The WEF video and blog post got a lot of criticism from cryptocurrency supporters after it was published. A number of individuals said the Switzerland-based WEF’s talking points had faults in the assumptions underpinning the group’s entire theory.

“The authors of this are really confused about basic fundamentals,” the co-founder and CEO of Blockstream, Adam Back said replying to the WEF tweet. Responding to Back’s comments one individual stressed:

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Adam, I don’t think they are confused. I think they know exactly what the f*** they are doing. It’s a calculated, well-orchestrated attack on bitcoin.

Back noted that either way the WEF’s arguments are “economically confused” and the statements “should be scientifically debunked for that reason.”

“They should be ashamed to say such nonsense so they at least can have a discussion while being coherent,” the Blockstream co-founder insisted. In addition to Back’s comments, Microstrategy’s CEO Michael Saylor had also responded to the WEF’s tweet and video about Bitcoin changing to PoS.

“If you remove the energy from anything useful you can almost eliminate its environmental impact,” Saylor said. “This is most common in fantasy novels and computer games. Real planes, trains, automobiles, homes, food, medicine, machines, and money all benefit from energy. So do real people.”

Plan B Says Misinformation on Bitcoin Is Consistent With the WEF Mission

The creator of the bitcoin stock-to-flow (S2F) price model, Plan B, also rubbed the WEF’s ‘Great Reset’ agenda into the conversation. Plan B said: “At least this WEF attack… [or] misinformation on bitcoin is consistent with the WEF mission.”

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Plan B’s tweet in response to the WEF tweet on Wednesday, April 27, 2022.

Accompanying Plan B’s text was a photo of the controversial WEF tweet about the Great Reset which says: “You’ll own nothing, and you’ll be happy. This is how our world could change by 2030.” However, the WEF tweet has been deleted by the owner of the Twitter account and only exists on archive.org’s Wayback Machine.

Tags in this story

Adam Back, Bitcoin code, Bitcoin mining, Blockstream CEO, Chris Larsen, cleanupbitcoin.com, Climate Agenda, climate crisis, Code Change, environment, environmental impact, Great Reset, greenpeace, michael saylor, microstrategy ceo, mining bitcoin, Plan B, PoS, PoW, Proof of Work, Proof-of-Stake, Ripple Labs co-founder, Switzerland-based WEF, WEF, WEF Agenda, WEF mission, WEF’s tweet, World Economic Forum

What do you think about the World Economic Forum’s latest tweet about changing Bitcoin’s codebase and miners staking bitcoins to verify transactions? Let us know what you think about this subject in the comments section below.

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Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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