Bitcoin Could Become Legitimate Treasury Reserve Asset for US Largest Companies

Michael Saylor continues to ride the Bitcoin wave at the end of 2023. Here’s what he had to say about Bitcoin among others recently.

Saylor made sure to state recently that Bitcoin (BTC) could soon become a “legitimate” treasury reserve asset for top US companies.

Michael Saylor, CEO of MicroStrategy, believes that the new accounting standards set by the Financial Accounting Standards Board (FASB) for publicly traded companies in the United States could accelerate the adoption of Bitcoin.

The FASB is responsible for regulating how companies report assets on their balance sheet.

The new rules, which will come into effect from December 15, 2024, will require companies that hold cryptocurrencies to report the “fair value” of these assets.

Explains Saylor,

“The real significance is that there are companies like Berkshire Hathaway and Apple Computer that have $100 billion-plus in cash, and right now they have to invest it in treasuries and sovereign debt. And with this change in fair value accounting you’re going to have a commodity that’s valued as fair value and it becomes a legitimate treasury reserve asset for publicly traded companies.”

The Financial Accounting Standards Board (FASB) has stated that stakeholders believe the current rules regarding accounting for losses in the value of a company’s cryptocurrency holdings, but not gains, are inadequate in providing information that reflects the underlying economics of those assets and the entity’s financial position.

The FASB suggests that measuring crypto assets at fair value will better reflect their economic value and likely reduce the cost and complexity of accounting for them under the current cost-less-impairment model.

Saylor also says he believes that Bitcoin is part of an ongoing trend to digitalize various things that people use.

“We’re going through a digital transformation of everything. Apple represents a digital transformation of telephones and cameras and Google is the transformation of books and libraries. Bitcoin represents the digital transformation of capital. 99.9% of the capital in the world is tied up in real estate and stocks and precious metals and bonds. And so we’re .1% transformed.”

He continued and said:

“People, as they get educated on digital assets, are realizing that they ought to be allocating more and more of their capital to this digital asset and so they’re moving from .1% to .2%. And I think that’s really driving the trend. I’ve said it before, if Bitcoin is not going to zero, it’s going to $1 million. The real question is, is it a legitimate asset? If it’s a legitimate institutional asset, everybody is under-allocated to it.”