GM Brew Crew, let us be your reminder that although it may feel like a Wednesday, it’s a short week - Thursday LOADING. Let’s dive in ⬇️

On the menu today:

• 🚨 ACCOUNTING RULES CHANGED FOR DIGITAL ASSETS

• 👀 SPOT ETHEREUM ETF PROPOSAL

• 🐋 CRYPTO WHALE LOSES $24M IN HACK

Today’s Charts:

🚨 ACCOUNTING RULES CHANGED FOR DIGITAL ASSETS

The United States Financial Accounting Standards Board (FASB) has unanimously approved new accounting rules regarding the fair value of cryptocurrency holdings for companies.

These accounting rules will take effect in 2025 and apply to companies following U.S. Generally Accepted Accounting Principles (GAAP).

So… what are the rule changes?

➡️ Previously, companies were required to retain impairment losses on their balance sheets, even if the cryptocurrency recovered its value after a sudden decline.

Let’s put this in simple terms:

• A company buys $1 million of bitcoin and records it as a long-lived intangible asset on its balance sheet at the purchase price of $1 milly

• Bitcoin price and the company recognizes their loss - let’s say loss of $250k - and lists its bitcoin value as $750k on the balance sheet

• THE KICKER - if bitcoin goes back up and the company’s bitcoin is worth $1 million again, the company can’t recognize the gain and must keep their bitcoin listing at $750k 😑

➡️ The key change involves recording cryptocurrency at its fair market value on corporate balance sheets.

The new accounting method allows companies to reflect financial recoveries from increasing crypto prices.

• Now, the same company can record that gain of $250k and list their bitcoin value back at $1 million

• It’s almost as if this makes sense… you can actually record the true value of the digital asset 🤣

The rule change will impact crypto-native companies like Coinbase and companies like MicroStrategy and Tesla that hold substantial crypto reserves.

👀 SPOT ETHEREUM ETF PROPOSAL