Above the Fold

Does It Make Sense for Companies to Keep Bitcoin Balances?

With millions of consumers investing and/or holding Bitcoin or other cryptocurrencies, the question is not only if businesses should accept them as forms of payment, but whether these often volatile cryptos should be held as investments on corporate balance sheets. Companies like Tesla, Square Inc., Microstrategy Inc. and others have been public about their holdings in Bitcoin, but according to the Wall Street Journal, are facing challenges managing these “grey area investments.” 

Cryptos are considered “indefinite-lived intangible assets,” not currencies. This means that dips in value below what a company paid can trigger impairment charges and obviously affect how strong a balance sheet appears to investors. More importantly, dramatic shifts in crypto prices can cause wild swings in stock prices or even affect the fiscal health of a company overall. The other option for businesses who want to accept Bitcoin and other cryptos would be to use them simply as a payment service, then immediately convert the virtual currency into legal tender of the country they chose through a sale in the open market. Of course, there are still risks of price slippage there as well. As it stands now, most chief financial officers (84% according to a recent Gartner study) do not plan to hold these volatile assets.

Three Things 

1. Fourth Vaccine Set to Gain Authorized Use for COVID-19 – The experimental, two-dose vaccine from Novavax was shown to be 90.4% effective at preventing symptomatic disease in a nearly 30,000-person trial. The vaccine proved effective against several variants but even if approved for emergency use, would still be months away from distribution as manufacturing hurdles remain.
2. Tesla Goes Plaid (Yes, Another SpaceBalls Reference) – An earlier promise from founder Elon Musk has finally come to fruition (and set a world record doing so). The Model S “Plaid” variant, a nod to the sci-fi spoof’s ultra-warp-speed, hit the market as the world’s fastest production car. The car will go from 0-60 mph in less than 2 seconds and costs just under $130,000; it also features an airplane-style yoke instead of a traditional steering wheel. There was an even faster Plaid+ version that was nixed at the last minute.
3. Apple Watch Could Aid Diabetics – The best-selling wearable is likely to become even more health conscious next year as recent data from Bloomberg suggests blood glucose and temperature readings could be added in 2022. A less expensive Apple Watch SE and a sports-centric model are expected next year as well. Pundits see 2021 upgrades to be less substantial, centered around aesthetic refinements. 

Did You Know? 

Fun Fed Facts

In its more than 100-year history, the Federal Reserve (Fed) has only had 15 leaders. Janet Yellen was the first female Fed Chairwoman and the first registered Democrat since Paul Volcker to serve. William Martin was the longest serving chairman from 1951 to 1970, followed by Alan Greenspan. Contrary to popular belief, the Fed doesn’t print money (that job is left to the U.S. Treasury); it does, however, decide when it should be released into circulation. Ironically, only about 11% of America’s money supply is physical currency.