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Bitcoin Bounces Over $43K, Altcoins, Crypto Stocks Burst Higher as Fed Projects Rate Cuts Next Year - CoinDesk

The Financial Accounting Standards Board, an outfit known as FASB that helps create rules for corporate bookkeeping, published a bulletin on Wednesday about implementing a long-awaited rule change that will benefit firms that hold Bitcoin and other cryptocurrencies.

Under the current accounting regime, firms such as Tesla and Block that hold Bitcoin must report a loss in earnings reports if the digital asset drops in value during a given time. At the same time, they cant record a profit if the price goes up. In practice, this means that a company that bought Bitcoin at $25,000 and saw it dip to $20,000 must maintain the lower value on its balance sheeteven if the price soars to $40,000 right after.

The price of Bitcoin, which jumped on the FASB news, was a little over $42,000 at midday on Wednesday. Tesla owns around 10,000 while Block has about 8,000, and as both firms acquired most or all of their Bitcoin holdings at a lower price, they stand to reap a gain when the new rules are enacted, according to FASB, for fiscal years beginning after Dec. 15, 2024.

The biggest beneficiary of the rule change is set to be MicroStrategy, a onetime cybersecurity firm that pivoted to acquiring large amounts of Bitcoin several years ago. The firm says it currently owns nearly 160,000, which it acquired at an average cost of just under $30,000which at current prices would be a net of almost $2 billion.

The forthcoming rule changes have been expected for months, but the share price of MicroStrategy nonetheless jumped 5% on the news. Shares of Tesla and Block, whose Bitcoin holdings represent only a small portion of the value, were down slightly.

The price of Bitcoin, historically volatile, is up around 180% this year as the crypto market appears to be recovering from a wave of scandals and ongoing regulatory scrutiny. Bitcoin fell to a low of around $16,000 last December after reaching its all-time high of roughly $69,000 in the fall of 2021.

The FASB announcement also may encourage other corporations to include crypto as part of their corporate treasuries since the ability to record it at fair market value will eliminate a significant impediment to holding it.

This upgrade to accounting standards will facilitate the adoption of [Bitcoin] as a treasury reserve asset by corporations worldwide, MicroStrategy cofounder Michael Saylor wrote in response to the news.

FASBs forthcoming update will be the first its issued for crypto in nearly a decade. When the body first issued guidance for crypto, it classified digital assets as intangible and in the same category of trademarks and goodwill, which likewise are marked down in the event of a drop in value but not marked up if the value rises.

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Tesla and Block among Bitcoin-holding firms to get boost from accounting rule change in late 2024 - Fortune

Bitcoin and other cryptocurrencies settled on Tuesday after one of the worst crypto selloffs this year, though digital assets continue to hold on to gains from a recent rally that has carried prices to their highest levels since April 2022.

The price of Bitcoin was down less than 1% over the past 24 hours to $41,800, having briefly traded below $41,000 on Monday amid the worst selloff for the token on a daily time frame since early March, according to Dow Jones Market Data. Bitcoin has retreated from its recent peak above $44,000the highest point since April 2022but still remains up by more than 50% in two months in the latest stage of a crypto recovery this year that has sparked calls for a new bull market.

Bitcoin [pulled back on Monday], but it has yet to impact our short-term trend following gauges, which point higher, said Katie Stockton, managing partner at technical research firm Fairlead Strategies.

The major narrative driving Bitcoin prices higher in recent months has been optimism that U.S. regulators will soon approve the first spot Bitcoin exchange-traded fund (ETF), which would be expected to usher in a fresh wave of investor interest.

An improving macroeconomic backdrop has also helped, particularly recent signs of waning inflation and slowing growth that have raised expectations that the Federal Reserve will cut interest rates multiple times next year. Higher rates have heaped pressure on tokens and other risk-sensitive bets like stocks since 2022, and hopes that borrowing costs will soon come down represent a key tailwind for both asset classes.

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In focus on Tuesday is inflation data in the form of the U.S. consumer price index (CPI) for November, which could move cryptos just like the Dow Jones Industrial Average and S&P 500 in the stock market. Ahead of the Feds next monetary policy decision, due Wednesday, the inflation reading could shift estimates for the first possible rate cut next year, which is currently being priced-in for March. The CPI print was in line with expectations, with consumer prices rising 3.1% from a year ago. Bitcoin was little moved in the immediate wake of the release.

From a technical market perspective, analysts see the move lower in Bitcoinwhich some blamed on profit-takingas doing little to shake the bullish narrative, with momentum remaining behind crypto prices.

Bitcoin would confirm another breakout if it can finish this Sunday above around $42,200 resistance. If confirmed, a breakout would put next resistance near $48,600, said Stockton. Intermediate-term momentum remains strongly positive suggesting overbought conditions can be sustained without a major pullback in the weeks ahead. Initial support for bitcoin is at the rising 50-day moving average around $37,400.

Beyond Bitcoin, Ether the second-largest cryptolost less than 1% to $2,220. Smaller tokens or altcoins had a more firm rebound, with Cardano climbing 9% and Polygon pushing 6% higher. Memecoins were more muted, with Dogecoin up less than 1% and Shiba Inu

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Write to Jack Denton at jack.denton@barrons.com

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Bitcoin Price Settles After Worst Selloff in 9 Months. Where Crypto Goes Next. - Barron's

Bitcoin and other cryptocurrencies fell on Monday, retreating from 20-month highs but with prices still near the peak of a recent rally. The days ahead see catalysts including the next Federal Reserve decision that could reignite sentiment.

The price of Bitcoin has fallen 5% over the past 24 hours to $41,550, sliding lower from levels near $44,500 on Friday, which marked the highest point for the largest digital asset since early April 2022before tokens plunged into a brutal and prolonged bear market. Bitcoin has surged by some two-thirds in two months, ending a multi-month stretch of subdued trading and spurring calls for a new crypto bull market.

A wave of profit-taking hit the cryptocurrency market on Monday morningwe saw a massive exit from long positions in low liquidity before the regular session in Asia. Strong demand for risk assets in traditional markets suggests that the market will try to get back on its previous growth track, said Alex Kuptsikevich, an analyst at broker FxPro. Thisdid not break the bullish trend. In our view, it will remain in force if Bitcoin manages to hold above $40,000.

Multiple factors have supported gains in crypto prices, including optimism that U.S. regulators will soon approve the first spot Bitcoin exchange-traded fund, which would be expected to usher in a fresh wave of investor interest. The improving macroeconomic backdropwith expectations the Fed will cut interest rates multiple times next yearand historically tight token supply also have helped.

Like the Dow Jones Industrial Average and S&P 500, Bitcoin has benefited from macro tailwinds as waning inflation and slowing growth support the prospect of rates coming down significantly next year from a generational peak.That is why the latest Fed monetary policy meeting this week, on Tuesday and Wednesday, looms large.

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While markets dont expect the central bank to lower borrowing costs this month, the press conference from Fed Chairman Jerome Powell will be scrutinized for signs of rate-cut timing, with traders currently pricing in the first cut as soon as March. Any dovish commentary from Powell, or indications rates could be lowered sooner rather than later, has the potential to restart the crypto rally in the absence of other major catalysts such as spot Bitcoin ETF news.

Overall, the tea leaves in crypto derivatives still point to bullish animal spirits. The most popular strike pricethe value at which the option can be exercised, representing a price targetacross all contracts is for Bitcoin at $50,000. There is a concentration of $50,000 Bitcoin call options for the Jan. 26 expiration.

Beyond Bitcoin, Ether the second-largest cryptofell 7% to below $2,200. Smaller tokens, or altcoins, also were weak, with Cardano down 9% and Polygon off 8%. Memecoins fell, with Dogecoin dropping 7% and Shiba Inu shedding 8%.

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Write to Jack Denton at jack.denton@barrons.com

Excerpt from:
Bitcoin Price Retreats to Start the Week. This Could Restart the Crypto Rally. - Barron's