It has been just revealed that Bitcoin could see corporate adoption like never before due to some favorable conditions. Check out the latest reports about this below.
Bitcoin to see corporate adoption
In a recent interview with The Block, Sazmining President and COO Kent Halliburton expressed his belief that the new fair value accounting rules will have a “hugely positive” impact on corporate adoption of Bitcoin.
These new rules will remove a barrier that previously prevented companies from diversifying their treasury holdings into the digital asset.
Halliburton mentioned that Michael Saylor held a symposium for corporate leaders interested in adding Bitcoin to their balance sheet in 2021. Many attendees showed up, indicating a significant level of corporate interest. However, it was clear that the accounting rules for bitcoin were a hindrance to adoption.
Fortunately, the Financial Accounting Standards Board, a U.S. regulating body, has approved new rules that will allow companies to report their crypto holdings at fair market value.
These rules will be published by the end of 2023 and become active in 2025, but companies can apply them early. Bloomberg Law reported on this earlier this month.
According to Halliburton, the new accounting method for Bitcoin will not solve issues with the cryptocurrency’s price volatility.
However, it will now allow corporations to reflect both upward and downward price fluctuations when adding bitcoin to their balance sheets.
Previously, bitcoin was only measured at impairment, adjusting for price drops but not increases. Fair market value, on the other hand, describes an asset’s most recent valuation.
With this “accounting stigma” removed, Halliburton believes that corporations now have the same incentives as individuals to hold Bitcoin.
He predicts that corporations may diversify a portion of their treasury holdings into bitcoin from dollars.
Sazmining COO added that whether or not corporations will adjust their strategies towards holding bitcoin on their balance sheet before the rules become active will depend on bitcoin’s price action.
If they start to believe that a bull run is imminent, more aggressive corporations may acquire bitcoin ahead of the rules activating in 2025.
We suggest that you check out the complete original notes posted by the online publication The Block.
