Bitcoin

Fair Value Accounting for Bitcoin: FASB Rules Take Effect

Published

4 months ago

December 16, 2024

As of today, the Financial Accounting Standards Board will put its Fair Value accounting rules on BTC and other eligible crypto assets into effect.

Under the new rules, companies will measure crypto assets at fair value and update them at each reporting period in their financial statements. This will help companies realize both profits and losses based on Bitcoin’s (BTC) market prices, helping them keep pace with the often fluctuating traded status of the currency. FASB ASC Subtopic 350-60 outlines a new accounting standard that is suitable for fungible crypto assets that meet certain requirements. However, NFTs, wrapped tokens, and internally generated digital assets are exempt from the scope.

HISTORY: FASB FAIR VALUE ACCOUNTING RULES FOR #BITCOIN OFFICIALLY TAKE EFFECT TODAY
Previously, companies could only value BTC at the price they bought, NOT the gains
THE CORPORATE ADOPTION WAVE pic.twitter.com/3NHmLsEauX
— The Bitcoin Historian (@pete_rizzo_) December 16, 2024

Companies holding BTC as treasury reserve assets can now benefit from simplified reporting processes due to FASB’s decision to embrace fair value accounting. The update is anticipated to accelerate corporate adoption by providing greater transparency and a more precise valuation of crypto holdings for investors, creditors, and other stakeholders. As businesses increasingly turn to BTC as a long-term strategic reserve, this rule change will cement BTC’s dominance further into the fabric of modern finance.

Allowing companies to account for BTC, with BTC assets priced at fair value, will do away with a major disjunction in corporate reporting, given that BTC used to be to be valued using its purchase price until now. Any gains were left out of the records, and only losses were recorded if the value decreased. Offering this option will also give retail investors an unrounded view of a company’s financial position.

The new rules, which mandate reporting of BTC at current market value, will provide more transparency and accuracy of the financial statements, allowing investors to assess risks, cash flows, and performance more effectively for companies such as MicroStrategy, Tesla and so on. Differences between traditional markets and the crypto economy fade as BTC’s grip as a financial asset becomes firm and clearer, and fair-value accounting standards are now in place.

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Tariff Carnage Starting to Fulfill BTC’s ‘Store of Value’ Promise

Published

3 hours ago

April 27, 2025

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April has been a month of extreme volatility and tumultuous times for traders.

From conflicting headlines about President Donald Trump’s tariffs against other nations to total confusion about which assets to seek shelter in, it has been one for the record books.

Amid all the confusion, when traditional “haven assets” failed to act as safe places to park money, one bright spot emerged that might have surprised some market participants: bitcoin.

“Historically, cash (the US dollar), bonds (US Treasuries), the Swiss Franc, and gold have fulfilled that role [safe haven], with bitcoin edging in on some of that territory,” said NYDIG Research in a note.

Safe haven asset performance (NYDIG Research)

NYDIG’s data showed that while gold and Swiss Franc had been consistent safe-haven winners, since ‘Liberation Day’—when President Trump announced sweeping tariff hikes on April 2, kicking off extreme volatility in the market—bitcoin has been added to the list.

“Bitcoin has acted less like a liquid levered version of levered US equity beta and more like the non-sovereign issued store of value that it is,” NYDIG wrote.

Zooming out, it seems that as the “sell America” trade gains momentum, investors are taking notice of bitcoin and the original promise of the biggest cryptocurrency.

“Though the connection is still tentative, bitcoin appears to be fulfilling its original promise as a non-sovereign store of value, designed to thrive in times like these,” NYDIG added.

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Bitcoin Continues To Flow Out Of Major Exchanges — Supply Squeeze Soon?

Published

13 hours ago

April 27, 2025

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It was quite the coincidence that the cryptocurrency market jolted back to life after Easter Sunday, with Bitcoin leading the way with more than a double-digit gain. While the price of BTC continues to hold above the critical $94,000 level, the premier cryptocurrency seems to be losing some momentum.

Unsurprisingly, investors appear to be increasingly confident in the promise of this recent rally, as significant amounts of BTC continue to make their way off major centralized exchanges over the past few days. Here’s how much investors have moved in the past few days.

Over 35,000 BTC Move Out Of Coinbase And Binance

In a Quicktake post on the CryptoQuant platform, crypto analyst João Wedson revealed that Binance, the world’s largest cryptocurrency exchange by trading volume, has seen increased activity over the past few days. The exchange netflow data shows that huge amounts of Bitcoin have been withdrawn from the platform in recent days.

According to CryptoQuant data, a total of 27,750 BTC (worth $2.63 billion at current price) was moved out of Binance on Friday, April 25. This latest round of withdrawals represents the third-largest net outflow in the centralized exchange’s history.

The movement of significant crypto amounts from exchanges, which offer services like selling to non-custodial wallets, suggests a potential shift in investor sentiment and strategy. Large exchange outflows often signal increased confidence of holders in the long-term potential of an asset.

Wedson noted that the recent outflows do not guarantee a price rally for Bitcoin, but they do signal strong institutional activity, which is often a precursor for major volatility. Citing China’s crypto ban in 2021, the crypto analyst highlighted how massive exchange outflows didn’t prevent the dump.

At the same time, Wedson mentioned that the continuous Bitcoin outflows over several days, like during the FTX collapse, preceded a price bottom and the eventual market recovery. Ultimately, the online pundit hinted at paying close attention to the overall trend of the exchange netflow rather than a single-day activity.

Similarly, more than 7,000 BTC (worth approximately $66.5 million) have made their way out of the Coinbase exchange. According to the CryptoQuant analyst Amr Taha, this negative exchange netflow could be an indicator of increased institutional activity, as Coinbase is known as the primary crypto vendor for US-based institutions.

Taha said:

These large outflows typically suggest accumulation by institutions or large investors, potentially signaling bullish sentiment.

The analyst outlined that if the dwindling exchange reserves correlate with an increased spot demand or ETF inflows, a supply squeeze could be on the horizon, potentially pushing the price to the upside.

Bitcoin Price At A Glance

As of this writing, the price of BTC sits just beneath $95,200, reflecting an almost 2% increase in the past 24 hours.

Featured image from iStock, chart from TradingView

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Bitcoin Perpetual Swaps Signal Short Bias Amid Price Rebound – Details

Published

21 hours ago

April 26, 2025

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The Bitcoin market saw another rebound in the past week as prices leaped by over 12% to hit a local peak of $95,600. Amid the ongoing market euphoria, prominent blockchain analytics company Glassnode has shared some important developments in the Bitcoin derivative markets.

Bitcoin Short Bets Rise Despite Price Rally, Setting Stage For Volatility

Despite a bullish trading week, derivative traders are approaching the Bitcoin market with skepticism, as evidenced by a build-up of leveraged short positions.

In a recent X post on April 25, Glassnode reported that Open Interest (OI) in Bitcoin perpetual swaps climbed to 218,000 BTC, marking a 15.6% increase from early March. In line with market activity, this rise in Open Interest aligns with increased leverage, introducing the potential for market volatility via liquidations or stop-outs.

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Generally, a rise in Open Interest amidst a price rally is expected to signal long-term market confidence. However, Glassnode’s findings have revealed an opposite scenario. Despite Bitcoin’s bullish strides in the past week, short market positions appear to be dominating the perpetual futures markets.

This concerning development is indicated by a decline in the average funding rate, which has now slipped into negative territory to sit around -0.023%. The perpetual funding rate is a periodic payment between long and short traders aimed at keeping the contract price in line with the underlying spot price.

A negative funding rate indicates short traders pay long traders as Bitcoin’s perpetual contract price is trading below the spot price. This is caused by a higher number of short positions as traders are largely bearish about Bitcoin, even despite recent gains.

Furthermore, the 7-day moving average (7DMA) of long-side funding premiums has dropped to $88,000 per hour, reinforcing this short-dominant sentiment. This downtrend indicates a waning demand for long positions, as traders exhibit a short bias.

However, Glassnode presents a bullish note stating that the present combination of rising leverage and short positions paves the way for a potential short squeeze, where an unexpected upward price move forces short-sellers to close their positions, thereby driving prices even higher.

Bitcoin Price Overview

At the time of writing, Bitcoin trades at $94,629 following a 1.01% retracement from its local peak price on April 25. Despite creeping developments in the perpetual futures market, the BTC market remains highly bullish, indicated by gains of 1.02%, 11.12%, and 8.32% in the last one, seven, and thirty days, respectively. With a market cap of $1.88 trillion, the premier cryptocurrency ranks as the largest digital asset and fifth-largest asset in the world.

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