#BTCOutlook

Starting in 2025, a new FASB rule will require US companies to report cryptocurrency holdings at fair value each quarter. According to Deloitte, "The new guidance requires entities to subsequently measure certain crypto assets at fair value, with changes in fair value recorded in net income in each reporting period."

Previously, companies typically classified Bitcoin holdings as intangible assets subject to impairment testing. This meant Bitcoin held by a company could be written down if its price fell but could not be marked up until it was sold, even if the price recovered in the meantime.

For companies like MicroStrategy the new rule might offer a clearer way to report their cryptocurrency holdings. While the technical details and adoption will vary by company, the update could enhance transparency and influence how businesses approach Bitcoin and other cryptocurrencies.

Beyond MicroStrategy, all eyes will be on major market cap players like NVIDIA, Apple, Microsoft, Alphabet, Amazon, and Meta to see if they embrace Bitcoin in 2025. While many companies are exploring Bitcoin, it’s important to recognise the expanding interest from a wider range of institutions, including asset managers, family offices, and pension funds.

In May 2024, the State of Wisconsin Investment Board became one of the first U.S. public pension funds to allocate to a spot Bitcoin ETF. By November 2024, a UK pension fund followed suit, making history by allocating 3% of its total assets to Bitcoin. Institutional and high-net-worth buying could prove pivotal in shaping Bitcoin’s trajectory in 2025.

The outlook for Bitcoin in 2025 suggests an action-packed year, with opportunities, challenges, and volatility ahead. As this article is published in early December, developments later in the month could still shape the 2025 outlook. Investors should stay updated on evolving factors, including policy changes and major market movements, to navigate the year effectively.