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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Julius Wong who wrote (168271)	2/8/2021 6:29:00 PM
From: TobagoJack	Respond to of 217734

relentless ... the bubble, but still, a bubble that must be embraced as was the internet, only perhaps more so, as a concentrated single item play bloomberg.com Novogratz Sees Bitcoin at $100,000, ‘Every’ Company Adopting Sonali Basak 9 February 2021, 05:19 GMT+8 Michael Novogratz, the founder of cryptocurrency investment firm Galaxy Digital, sees Bitcoin more than doubling to $100,000 by the end of the year, spurred higher as more companies allow customers to use the token to make purchases. The coin jumped to an all-time high of $44,795 Monday after Tesla Inc. said it had bought $1.5 billion of the token with corporate cash reserves. The company also said it will allow customers to buy its electric cars with the coins. “You’re going to see every company in America do the same thing,” Novogratz said Monday in a Bloomberg Television interview. Between corporations adding Bitcoin to treasury funds and the city of Miami also considering adding the cryptocurrency to its balance sheet, “It doesn’t have to be a lot. It’s the messaging that matters, you’re seeing the herd here, and it’s coming.” Novogratz Calls Musk's Dogecoin Tweets Irresponsible WATCH: Mike Novogratz discusses Tesla investing $1.5 billion in Bitcoin and the frenzy around Dogecoin. The long-time crypto enthusiast and investor also speculated that other companies would consider moving excess reserves into Bitcoin, perhaps as a hedge against inflation or against a falling dollar. Novogratz said Tesla CEO Elon Musk was a “genius” in his decision to “listen to the people,” or weighing the interests of a rising generation. “One of the things that connect Bitcoin, and Tesla and solar stocks and ESG investing is millennials and Gen Z, young people are buying into the future, and they see cryptocurrencies -- Bitcoin and other cryptos -- as their currencies,” he said. MicroStrategy Inc.’s Michael Saylor, among the first to put cash into the cryptocurrency, said in September that the Federal Reserve’s relaxing of its inflation policy helped convince him to invest the enterprise-software maker’s reserves. But Bitcoin’s famed volatility -- it plunged 25% in two days last month -- has made it difficult for usually risk-averse CFOs to make it a regular part of corporate treasuries. “Now you got the biggest, the wealthiest man in the world and one of the biggest stories doing it,” Novogratz said. “You’ve got to think other CFOs and CEOs are saying, what should we be doing?” Novogratz’s Galaxy Digital Holdings Ltc., meanwhile, is already seeing the benefit. The stock rose 12% on Monday to a record giving the company a market capitalization of C$4.8 billion ($3.8 billion). — With assistance by Vildana Hajric (Updates with Galaxy Digital stock move in last paragraph.) Before it's here, it's on the Bloomberg Terminal. LEARN MORE

To: Julius Wong who wrote (168271)	2/9/2021 8:14:23 AM
From: TobagoJack	Read Replies (1) \| Respond to of 217734

Re <<Tesla>> ... can now modulate its P&L at month’s and quarter’s and year’s ends by adding a bit of BTC in the last few seconds of trades before market’s close bloomberg.com Elon Musk's Bitcoin Bet Is a Bean Counter's Nightmare Tesla is taking a massive financial risk, but it should be allowed to record the value of its Bitcoin in its accounts at the current market price. Chris Bryant February 9, 2021, 5:00 PM GMT+8 Financial dynamite. Photographer: Pool/Getty Images Europe Elon Musk’s decision to invest $1.5 billion of Tesla Inc.’s cash in bitcoin is financial dynamite that unites two speculative bubbles. There’s plenty to suggest the move is inadvisable. Though small in the context of Tesla’s $830 billion market value, this is still a material portion of Tesla’s $19.4 billion cash reserves to park in such a volatile asset. Tesla wouldn’t be the first car company to operate as a quasi hedge fund. For a time Porsche made tons of money trading derivatives, almost bankrupting itself in the process. Owning cryptocurrency sits badly with Musk’s green ethos: Some Bitcoins are mined with renewable power but the industry still leaves a sizeable carbon footprint. Musk’s purchase has boosted Bitcoin’s price by almost 20% so in one sense he’s won already. Unfortunately his bet won’t improve Tesla’s reported earnings or boost the value of its cash reserves. That’s because cryptocurrencies — despite the name — aren’t classified as cash or equivalents for accounting purposes. Nor are they considered a financial investment under current accounting rules. Instead they’re deemed an intangible asset whose value is reported at cost in corporate accounts and must be written down if the price declines. The value cannot be written up again until they’re sold. This is a significant disadvantage and might discourage other corporate treasurers from following Musk’s lead. It’s also not entirely fair, whatever you think about Musk gambling with Tesla’s money. Shouldn’t accounting standards be updated for the crypto era? Here’s the relevant bit from Tesla’s 10-k: Digital assets are considered indefinite-lived intangible assets under applicable accounting rules. Accordingly, any decrease in their fair values below our carrying values for such assets at any time subsequent to their acquisition will require us to recognize impairment charges, whereas we may make no upward revisions for any market price increases until a sale. As we currently intend to hold these assets long-term, these charges may negatively impact our profitability in the periods in which such impairments occur even if the overall market values of these assets increase. In plain English, if the price of Bitcoin price suddenly fell by, say, a third compared to the Tesla’s cost acquiring it — pretty plausible in the context of Bitcoin’s historic volatility — then the carmaker’s GAAP earnings would be short $500 million during that quarter. Tesla will book no corresponding gain if the price rises again. The volatility of Tesla’s earnings could increase even more if customers start paying for their cars in Bitcoin, as Musk will soon allow, and the company elects not to convert it immediately into U.S. dollars. This isn’t just a Tesla problem. Business analytics company MicroStrategy Inc. had invested a whopping $1.1 billion in Bitcoin as of Dec. 31. It even decided to make Bitcoin its primary treasury reserve asset, and so far the decision has paid off: Its holdings have almost trebled in value. But because Bitcoin’s price has fluctuated, MicroStrategy has already needed to book a total of $71 million of impairments, including $26.5 million in the fourth quarter. The accounting treatment is weird because if you can buy a Tesla with Bitcoin then it’s clearly serving as a medium of exchange, albeit a volatile one that’s not state-backed. Foreign currencies can be volatile too — just ask Argentina. There’s also a clearly observable market price for Bitcoin as it’s traded on exchanges. In view of tentative efforts by airlines to accept cryptocurrencies as payment, industry body IATA has argued that these tokens should be “treated as cash if they function as cash.” Analysts will doubtless adjust Tesla’s reported financials to reflect the current value of its Bitcoin holdings but it’s an inelegant and less transparent approach. Unfortunately, the standard setters don’t appear to be in a rush to embrace the crypto revolution. The Financial Accounting Standards Board, whose job is to oversee Generally Accepted Accounting Principles (GAAP), voted unanimously not to add cryptocurrencies to its technical agenda in October. One can understand the reluctance. Accounting rules were created before cryptocurrencies were invented. The bean counters don’t want to be blamed if companies get their fingers burned. Still, with interest rates at zero, I doubt Tesla will be the last tech company to try to earn a better return on its cash holdings. Anyone who does so is taking a massive financial risk but they should be allowed to record the value of their Bitcoin at the current market price. Anything else gives investors an incomplete picture. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. To contact the author of this story: Chris Bryant at cbryant32@bloomberg.net To contact the editor responsible for this story: James Boxell at jboxell@bloomberg.net Before it's here, it's on the Bloomberg Terminal. LEARN MORE Sent from my iPad