Bitwise’s Chief Investment Officer, Matt Hougan, recently informed customers that MicroStrategy’s Bitcoin strategy is a noteworthy development that will probably persuade more businesses to use Bitcoin as a reserve asset. He believes that MicroStrategy’s lead and the shifting regulatory landscape in the United States under President-elect Donald Trump would cause a significant rise in the number of businesses adding Bitcoin to their treasuries.

Hougan noted in a research note that Bitcoin’s prior reputational hazards have been lessened due to the popularity of spot Bitcoin exchange-traded funds (ETFs) and the rising use of cryptocurrencies in the United States.

Significantly, recent changes in accounting regulations have provided further incentives for businesses considering adding Bitcoin to their balance sheets. In December, the Financial Accounting Standards Board introduced new reporting guidelines under ASU 2023-08. These new rules allow companies to account for Bitcoin price drops while also updating their disclosures when prices rise. This change marks a shift from earlier regulations that classified Bitcoin as an intangible asset, allowing only for price declines with no means to reflect price increases.

Hougan remarked, “If 70 companies were willing to add Bitcoin to their balance sheets when the accounting rules only allowed for price declines, imagine how many will do so now. Could it be 200? 500? A thousand?”

His insights were shared shortly before Trump’s inauguration on January 20, coinciding with MicroStrategy’s recent increase in Bitcoin holdings. Michael Saylor, Executive Chairman of MicroStrategy, revealed that the company currently holds about 450,000 BTC, valued at over $43 billion, and has plans to purchase more.

In 2024 alone, MicroStrategy invested $22 billion to acquire 258,320 BTC, surpassing the total supply of Bitcoin produced by miners that year, which was 218,829 BTC. Saylor has stated that the company intends to acquire an additional $42 billion in Bitcoin, an amount that would represent nearly three years’ worth of newly mined Bitcoin.