Michael Saylor says Bitcoin (BTC) could become a legitimate treasury reserve asset for America's largest companies
MicroStrategy founder and chief executive Michael Saylor says Bitcoin (BTC) could soon become a “legitimate” treasury reserve for leading US companies.
In a CNBC interview, Saylor says new Financial Accounting Standards Board (FASB) rules governing how publicly traded companies should report crypto holdings could accelerate Bitcoin adoption.
The FASB is a US agency that determines how companies must report assets on their balance sheets. The new rules, which will take effect after December 15, 2024, will require companies that hold cryptocurrencies to report the “fair value” of the assets.
Explains Saylor,
“The real significance is that there are companies like Berkshire Hathaway and Apple Computer that have $100 billion in cash and they now need to invest it in Treasuries and Treasuries. And with this change to fair value accounting, you get a commodity that is valued at fair value and becomes a legitimate treasury reserve asset for publicly traded companies.”
According to the FASB, stakeholders said the current rules, which require companies to account for declines in the value of their crypto holdings, but not increases, “fail to provide relevant information that (1) reflects the underlying economics of these assets and (2). ) the financial position of a company.”
Says the FASB,
“Measuring these assets at fair value not only better reflects the economics of crypto assets, but is also likely to reduce the costs and complexity associated with applying the current cost-less-impairment accounting model for many companies are.”
Saylor also says he believes Bitcoin is part of an ongoing trend toward digitizing various things that people use.
“We are currently experiencing a digital transformation of everything. Apple represents the digital transformation of phones and cameras and Google represents the transformation of books and libraries. Bitcoin stands for the digital transformation of capital. 99.9% of the world's capital is tied up in real estate, stocks, precious metals and bonds. So we have changed by 0.1%.
As people educate themselves about digital assets, they realize that they should invest more and more of their capital in these digital assets, and so it goes from 0.1% to 0.2%. And I think that's the real trend driver. I've said it before: If Bitcoin doesn't go to zero, it will go to $1 million. The real question is: Is it a legitimate asset? If it is a legitimate institutional asset, it is under-allocated.”
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