Bigger Bitcoin Price Catalyst Than The US BTC Reserve
The U.S. Securities and Exchange Commission (SEC) announced on Thursday, January 23, the repeal of Staff Accounting Bulletin (SAB) 121, which imposed strict accounting requirements on cryptocurrency custody by U.S. banks and financial institutions. Several industry experts said the move, encapsulated in the newly released SAB 122, is expected to be a more significant catalyst for Bitcoin price dynamics than the expected U.S. Bitcoin Reserve (SBR).
Impact on Bitcoin
Originally enacted in 2022, SAB 121 Banks are required to classify customers’ cryptocurrency holdings as liabilities on their balance sheets. This classification significantly increases operating costs and complexity for financial institutions, effectively preventing them from offering crypto-related services. This requirement therefore acts as a barrier, limiting the integration of Bitcoin and other cryptocurrencies into mainstream banking.
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The revocation of SAB 121 to SAB 122 effectively removes this accounting hurdle. SEC Commissioner Hester Peirce praised the decision on social media, saying: “Bye, bye SAB 121! It’s not fun: http://SEC.gov | Staff Accounting Bulletin No. 122.”
The Bitcoin community responded positively to the SEC’s decision. Andrew Parish, founder of x3, emphasized the significance of SAB 122 to X, assertion”, “The repeal of SAB 121 is a bigger catalyst for Bitcoin than the SBR. Bookmark this article. “Similarly, Troop founder Fred Krueger, Highlight Wider Market Impact, noting, “SAB 122 is very bullish for Bitcoin. More important than upcoming Bitcoin reserves. Watch now for banks to start adding to their holdings.”
Vijay Boyapati, a former Google engineer and author of “The Bullish Case for Bitcoin,” further noted Detailed Regarding the transformative potential of the SEC action, he said: “It’s really hard to overstate the magnitude of the change we’re witnessing. We went from the worst anti-Bitcoin, anti-innovation, anti-growth, anti-business management to the most friendly you could hope for. Bitcoin Management. This is 100% unpriced.”
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MicroStrategy executive chairman Michael Saylor succinctly reflected the market sentiment in his tweet: “SAB 121 has been withdrawn, allowing banks to custody Bitcoin. 🚀” This is consistent with Saylor’s previously outlined Bitcoin tgree catalysts Reach US$1 million For each coin, the facilitation of traditional bank custody is the last opening factor.
Regulatory easing is expected to promote greater institutional participation in the Bitcoin and cryptocurrency markets. Brian Moynihan, CEO Bank of AmericaThe second-largest U.S. bank by assets spoke about the potential for wider cryptocurrency adoption in an interview with CNBC’s Andrew Ross Sorkin at the World Economic Forum in Davos, Switzerland. “If the rules come in and make it something that you can actually do business with, you’re going to find that the banking system is going to work on the transaction side,” Moynihan said.
The statement is consistent with the SEC’s latest directive, indicating that banks are now more likely to develop and offer crypto services, including custody solutions, which were previously restricted by SAB 121. The removal of these regulatory barriers is expected to increase cryptocurrency liquidity and accessibility. Bitcoin could drive a new wave of demand similar to last January’s for spot ETFs.
At press time, BTC was trading at $105,466.
Featured image created using DALL.E, chart from TradingView.com
