FASBs fair value rule that goes into effect on 12/31 of this year will cause the biggest rugging and devaluation of the financial system since 2007/2008 and will likely make the GFC look benign.
Why is this?
Because there is no requirement for any company to prove that they can move the coins in their treasury.
Therefore if Coimbase loses coins - and doesn’t tell anybody (which they won’t) then Bitcoin will continue to accumulate and appreciate until they can no longer keep the Ponzi alive. By that time one can only imagine what the write-down will be across the balance sheets of every company in the US. It could be many trillions by the time it’s caught.
There is a simple solution. FASB can require that a company proves it can move its keys in order to declare the value on its balance sheet.
At a minimum, they get a signed statement from their custodian “certifying” that the coins can be moved - or they can be compelled to provide a digital signature.
Adding this requirement will not only remove the risk of a trillion dollar write-down of a central custodian- but it will cause massive innovation in the custody space for institutions. It would incentivize the roads to be built and would also incentivize more companies to hold Bitcoin in their treasury.
TLDR - there’s no requirement for any company to prove that can move the Bitcoin in their treasury - in order to claim the USD value on their balance sheet - this opens the door to trillions of $$ of write downs if we discover this after hyperbitcoinization.
Fundamentals /
npub12e…ky99g
2024-07-08 12:21:39
Author Public Key
npub12eml5kmtrjmdt0h8shgg32gye5yqsf2jha6a70jrqt82q9d960sspky99gPublished at
2024-07-08 12:21:39Event JSON
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"pubkey": "5677fa5b6b1cb6d5bee785d088a904cd08082552bf75df3e4302cea015a5d3e1",
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"kind": 1,
"tags": [],
"content": "FASBs fair value rule that goes into effect on 12/31 of this year will cause the biggest rugging and devaluation of the financial system since 2007/2008 and will likely make the GFC look benign.\n\nWhy is this?\n\nBecause there is no requirement for any company to prove that they can move the coins in their treasury.\n\nTherefore if Coimbase loses coins - and doesn’t tell anybody (which they won’t) then Bitcoin will continue to accumulate and appreciate until they can no longer keep the Ponzi alive. By that time one can only imagine what the write-down will be across the balance sheets of every company in the US. It could be many trillions by the time it’s caught.\n\nThere is a simple solution. FASB can require that a company proves it can move its keys in order to declare the value on its balance sheet. \n\nAt a minimum, they get a signed statement from their custodian “certifying” that the coins can be moved - or they can be compelled to provide a digital signature. \n\nAdding this requirement will not only remove the risk of a trillion dollar write-down of a central custodian- but it will cause massive innovation in the custody space for institutions. It would incentivize the roads to be built and would also incentivize more companies to hold Bitcoin in their treasury.\n\nTLDR - there’s no requirement for any company to prove that can move the Bitcoin in their treasury - in order to claim the USD value on their balance sheet - this opens the door to trillions of $$ of write downs if we discover this after hyperbitcoinization.",
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}