Wall Street Loves Bitcoin

Welcome to this week's Triple Entry! This week, we’re covering:

• ?? Coinbase crushed analysts’ Q4 earnings expectations.
• ?? Why banks are experiencing major Bitcoin ETF FOMO.
• ?? Crypto money laundering is down…by a lot.

?Let’s dive in!

The Main Entry: 3 Stories Proving Wall Street Loves Bitcoin?

Things have been a bit quiet on the accounting, tax, and regulatory front – unless you count?Gary Gensler saying ?Bitcoin is “not that decentralized…” and calls it “just an accounting ledger.” ???

But you can bet your Bitcoins that we’ll see major institutions and enterprises focus more on crypto accounting, tax, and finance matters going forward because they’re buying up Bitcoins like?93% of them ?have already been mined.?

Here are 3 stories illustrating Wall Street’s love for crypto:

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1. Coinbase crushed analysts’ earnings expectations in Q4.

If asset managers aren’t already buying Bitcoin through the spot ETFs, they’re probably considering the next best thing:?

Exposure to crypto through Coinbase stock. The leading crypto exchange in the US did not disappoint with its Q4 earnings report last week:?

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• Revenue:?$953.8M, surpassing the $822M forecasted by analysts.
• Earnings per share (EPS):?$1.04, well above the analyst predictions of $0.01.
• Net income:?$273M, marking the first instance of positive net income in two years.
• Trading volume:?$154B, exceeding the $143B anticipated by analysts.
• Bitcoin ETF Custody:?Coinbase is the custodian for 8 out of 11 Bitcoin ETFs

2. Banks are?begging?the SEC to let them hold Bitcoin.

Big banks are experiencing major Bitcoin ETF FOMO at the moment.?

In our?last issue , we explained how SAB 121, a piece of little-known accounting guidance from the SEC, is making it prohibitively expensive for banks to custody Bitcoin (which is why you don’t see any of their names on the list above).?

A powerful bank trade coalition sent the SEC?a letter ?requesting they change SAB 121 to allow banks to custody Bitcoin for ETF issuers. Pretty ironic considering that Bitcoin was Satoshi's response to the bank failures of 2008.

3. Spot BTC ETFs now hold ~260,000 BTC (worth $13.3 billion)

For context, that’s over 1% of all Bitcoins that will ever be created.?

After just one month, the ETFs now own more Bitcoin than Michael Saylor, who has been stacking sats since 2020. They’re buying?12.5x more ?Bitcoin per day than the network can produce. It doesn’t take an economist to figure out what that means.?

And they aren’t showing any sign of stopping. This could be an interesting year, folks.

Spotlight ?? - A Conversation on Proof of Reserves with The Network Firm

The topic of proof-of-reserves surged into the conversation in digital assets in the wake of FTX, and remains relevant more than a year out as the industry continues to mature.

For digital asset accounting and finance professionals - particularly digital asset custodians, exchanges, stablecoin issuers, or RWA tokenizers - there are still a lot of questions to answer - or questions to be thinking about concerning Proof of Reserve. Why do a Proof of Reserve? How is it different from a financial statement audit? How do you actually do one? Who should get a Proof of Reserve audit, and what does that actually mean?

Join The Network Firm and Bitwave?next Tuesday, 2/27 at 10a PST?for this free CPE webinar?on an increasingly relevant topic in digital asset accounting and finance.

Click here ?or through the image to register for FREE.?

The Water Cooler ??

Things worth talking about at the office water cooler…if you 1) talk to people, 2) still work in an office, and 3) have a water cooler.

Other Significant Findings

Check it out - three more stories of interest hand-picked for YOU, aka a thought leader in crypto accounting and finance. Can we do it in 100 words (or less)? Test us.?

• Crypto Money Laundering Down 29% in 2023: ? Chainlysis reports a significant drop in crypto money laundering, with illicit addresses moving $22.2 billion, down 29.5% from 2022. This decline suggests sanctions on mixers and changing criminal tactics, like increased use of blockchain bridges, are impacting illicit flows.?
• Bitwise Bitcoin ETF Gains RIA Network Approval: ? The Bitwise Bitcoin ETF Trust (BITB) was approved as an investment option by a $30B network of Registered Investment Advisors (RIAs). The move is significant because it represents a bridge between traditional financial advisory services and the burgeoning cryptocurrency market, indicating a shift toward mainstream acceptance of Bitcoin as a viable investment.?
• Ether Surges Past $3K Amid ETF Anticipation: ? Ether (ETH) exceeded $3,000 for the first time since April 2022, driven by speculation of a forthcoming spot ETH exchange-traded fund (ETF) approval in the U.S. This potential approval is seen as a significant boost for ETH, attracting conservative and institutional investors to the second-largest cryptocurrency.

Extraordinary Items ??

We feel bad for this reporter. Clearly she doesn't know that Vitalik is not programmed to have responses to these kinds of questions, so you'll break him if you ask. (Watch the video on X below or?right here )

Do you have any thoughts or feedback on this week's Triple Entry??Sound off in the comments and let me know what you found most helpful this week — I’d love to hear from you!

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“Calc”-you-later, ???

Trevor