Berenberg: “MicroStrategy’s Bitcoin Losses Are Misleading”

Berenberg analysts, led by Mark Palmer, argued in their recently published report that there may be a change in MicroStrategy’s strategy for reporting Bitcoin assets. Predictions about this potential change by MicroStrategy emerged following the approval of new rules by the US Financial Accounting Standards Board (FASB) that allow companies to report crypto assets at fair market value. While the Board received a positive response from the first voting phase, the new rules are expected to be approved and implemented by companies this year.

The report stated that MicroStrategy reported cumulative impairments of $2.23 billion since adopting its Bitcoin acquisition strategy in August 2020. On the other hand, Berenberg analysts argued that this situation gave rise to the misleading impression that the inherent value of the company was negatively affected, which was not actually the case. Analysts argued that misleading information created a negative perception that the company’s true value was in a bad state at the end of the day, and described it as highly likely that MicroStrategy would make this change.

The change will help MSTR and other companies holding digital assets eliminate the bad optics created by impairment losses under the rules enforced by the FASB.

Making a statement about the issue on social media, MicroStrategy CEO Michael Saylor said that this step removed a major obstacle to the institutional adoption of Bitcoin as a treasury asset.