The Daily: Strategy's $12.75 billion balance sheet boost, Ethereum faces 'intense competition' and more

The following article is adapted from The Block’s newsletter,  The Daily , which comes out on weekday afternoons.

Happy Thursday! After MicroStrategy said let's drop the "Micro," just "Strategy," it's cleaner, in yesterday's rebrand and reported fourth-quarter losses, its financials could be poised for a turnaround.

In today's newsletter, Bernstein analysts outline why Strategy is about to get a $12.75 billion boost to its balance sheet, JPMorgan says Ethereum is likely to keep facing "intense competition" from other networks, Sygnum forecasts that a Strategic Bitcoin Reserve could trigger a $20 billion market cap surge and more.

Meanwhile, Trump's media company files trademarks for a Made in America ETF, a Bitcoin Plus ETF and more investment products.

Let's get started.

Strategy's $12.75 billion balance sheet boost

Strategy (formerly MicroStrategy) is set for a $12.75 billion boost to its balance sheet after adopting new FASB fair value accounting rules for its bitcoin holdings, analysts at research and brokerage firm Bernstein said.

• Strategy reported a net loss of $670.8 million in the fourth quarter of 2024 on Wednesday, with operational expenses rising 693% year-over-year to $1.1 billion.
• That included just over $1 billion worth of impairment losses related to the company's bitcoin holdings, compared to $39.2 million during the same period in 2023.
• Previously, digital asset values on a company's books had to be marked down when prices fell but could not be adjusted upward if prices rose unless sold.
• However, with Strategy adopting the new accounting rules from January 2025, this will lead to a one-time cumulative adjustment of $12.75 billion to the opening balance of its retained earnings, the analysts, led by Gautam Chhugani, wrote — enabling the firm to recognize unrealized gains on its bitcoin position for the first time.
• "Beginning in Q1CY25 financials, the carrying value of bitcoin will align with its market value, allowing MSTR to report any appreciation in bitcoin's price as a gain in its net income," Chhugani said.
• However, uncertainty remains over the tax treatment of Strategy's bitcoin holdings under the new FASB rules in combination with provisions of the 2022 Inflation Reduction Act — meaning it could require a special exemption from the IRS.

Ethereum faces 'intense competition'

While the broader crypto market surged since the U.S. election, ether has lagged behind — not only underperforming bitcoin but also other altcoins.

• Ether's share of the total crypto market cap has now dropped to a four-year low, and Ethereum will continue to face "intense competition" from rival Layer 1 blockchains like Solana as well as lower-fee Layer 2 networks, JPMorgan analysts led by Nikolaos Panigirtzoglou said.
• Top decentralized applications like Uniswap, dYdX and Hyperliquid migrating to application-specific chains is also weakening Ethereum's base network and reducing its fee revenue, according to the analysts.
• Furthermore, Ethereum lacks a strong narrative compared to Bitcoin's positioning as a store of value, they added.

Bitcoin reserve could trigger $20 billion market cap surge

Sygnum’s Head of Investment Research, Katalin Tischhauser, forecasts that in a scenario where the U.S. purchases bitcoin for a strategic reserve, each $1 billion buy could trigger a $20 billion market cap multiplier effect .

• The small liquid supply of bitcoin could amplify this demand shock, driving exponential price growth as new money enters the market, she told The Block.
• This multiplier effect stems from various sources of demand, including state governments, institutional investors and corporate treasuries, according to Tischhauser.
• The forecast is based on observed trends in 2024 and growth in stablecoin market cap as a proxy signal, suggesting larger surges if central banks get more involved.

Satoshi may have still been active onchain as late as 2014

Coinbase director Conor Grogan claims to have identified wallets belonging to Satoshi Nakamoto, showing Bitcoin's pseudonymous creator was still active onchain as late as 2014 .

• Nakamoto's final known message — "I've moved on to other things" — was sent in April 2011 to developer Mike Hearn as part of an email exchange, marking his departure from active involvement in the Bitcoin project.
• Grogan's analysis of the "Patoshi Pattern" and early Bitcoin mining addresses supports the theory that Nakamoto holds around 1.1 million BTC ($109 billion).
• Analyzing 24 outbound sends, Grogan linked one of the addresses to CaVirtEx, a Canadian crypto exchange acquired by Kraken in 2016, speculating that co-founder Jesse Powell or others at the platform may know Nakamoto's identity if KYC data linked to the wallets was maintained.

BNB Chain's test memecoin surges to $52 million market cap after CZ post

A test memecoin on BNB Chain (TST) surged to a market cap of approximately $52 million after Binance founder and former CEO Changpeng "CZ" Zhao posted about it on X before dropping back to around $8 million.

• Zhao explained that the BNB Chain team created a tutorial video on launching memecoins via the Four.Meme platform, using TST as an example, prompting unexpected trading activity.
• The team later deleted the video and the private key for the creator address, with Zhao clarifying that TST is not an official BNB Chain token and neither Binance nor the BNB Chain team holds any.

In the next 24 hours

• U.S. nonfarm payrolls are due at 8:30 a.m. ET on Friday.
• U.S. FOMC members Michelle Bowman and Adriana Kugler will speak at 9:25 a.m. and 12 p.m., respectively.
• Moca Network is set to unlock 2.43 million MOCA tokens worth $325,000, representing 0.14% of its circulating supply.

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