What a change to GAAP accounting rules mean to the four year crypto-cycle

Crypto Rookies
5 min readDec 7, 2023


Bitcoin miners that were publicly traded in the US markets, used to have to sell massive amounts of $BTC to fund an upgrade to their equipment every four years to remain financially stable in their financial statements. As we enter yet another crypto bull run, the upcoming changes to the GAAP rules as to how companies account for the value of their crypto assets may have massive implications for the next pre-halving dip. It is entirely possible that these companies will favor the capital gains instead of the revenue stream associated with the mining process.


Bitcoin has been on a four year cycle which is believed to be due to the halving cycle, where the mining process difficulty doubles every four years. Mining operations (Riot Platforms — Nasdaq: $RIOT, Marathon Digital Holdings — Nasdaq: $MARA) that were listed on the public markets typically had to sell a large amount of $BTC pre-halving to fund an upgrade to their equipment in order to ensure their revenues were remaining stable enough to look good in the financial statements disclosed to the financial markets. This behavior may be about to change due to the upcoming changes to the GAAP accounting rules in regards to how crypto-assets are reported.

GAAP Rules

Microstrategy lobbied the US Financial Accounting Standards Board (FASB) to make it possible for Bitcoin to be accounted for in financial statements at its fair market value instead of the lowest potential value. Any corporate entity would be financially penalized for having crypto-assets in their financial statements due to the unfair value associated with them. You could have digital assets worth $1M being accounted for at only $100K which was difficult for these companies to convince their investors of their true worth. This new rule is expected to take into effect in 2025, which means it will not have an impact just yet, but we still need to prepare ourselves for this change.

This upcoming change will make not only bitcoin miners be financially stronger, but any other entity that has a large treasury of Bitcoin as a hedge against potential devaluation of government backed currencies.

Repurpose Mining Equipment to AI

As the difficulty of mining Bitcoin increases, it may become more valuable for crypto miners to convert their processing power to training AI models as a replacement of their revenue stream. This way, they can upgrade their equipment in a more efficient manner that is not tied to a four year cycle. Meanwhile, they could then sell BTC at the top instead of at a potential bottom. Overall, this could mean a more stable price for Bitcoin all thanks to better accounting rules.

Focus on Balance Sheet instead of Income Statement

Given these changes, Bitcoin miners may not be incentivized as much to sell $BTC at a low price to fund equipment upgrades when they know that historically speaking the price of Bitcoin would go down just a few months later. To stock market investors the balance sheet is as much part of their evaluation as to the income statement, therefore capital gains are as valuable as income generation. This would mean that we may not experience any more pre-halving dip, which would further stabilize the crypto industry.

As well, in the US, the corporate capital gain tax versus income tax are the same, however in other countries this could differ, so this shift of GAAP rules, may incentivize certain companies to move to a more tax efficient jurisdiction.

Impact for 2024 and 2025?

Since the GAAP rules may take effect in 2025, is there an impact we can expect in 2024? It is possible some corporate entities may front-run this change and lead to an early bull run, especially when combined with ETF approval. Meanwhile, the standard four year cycle for Bitcoin would imply another correction late 2025, however if the GAAP rules for crypto assets take into effect slightly before the correction is to happen, we may see a large number of companies converting a portion of their treasury into crypto and this could last for many months, depending on market conditions it may be possible the bear market is prevented from these late comers. Interestingly speaking, this is not only true for corporations, but also for governments as we can see El Salvador going back into profits after a year holding at a loss. We may see many more governments, corporations, and pension plans creating a sustained growth loop for years to come breaking apart the traditional 4 year cycle of Bitcoin/crypto.


Accounting rules regarding crypto-assets are changing for the better, which means capital gains may become favorable to Bitcoin mining income which in turn would significantly reduce the probability of pre-halving correction. If the equipment is no longer good enough to mine Bitcoin, it is possible it can be used to process AI computation instead. The financial operations of Bitcoin miners and other corporate entities may find a use for crypto assets as part of their treasury which is likely to reduce the crypto-volatility further. Hybrid model integrating public market and tokenization value creation may be the future of financial engineering that every Chief Financial Officer needs to master.


Crypto Rookies is a crypto investor, serial entrepreneur in Artificial Intelligence and Web3/crypto with expertise in tokenomics and market making. Currently CEO of Smooth, which is a Market Making as a Service infrastructure designed to prevent economic collapse of crypto-currencies.

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