- Industry leaders predict new SEC guidance will spark significant Bitcoin accumulation by traditional financial institutions.
- With barriers lifted, experts anticipate increased liquidity and new investment opportunities in Bitcoin markets.
The SEC announced on January 23 the end of Staff Accounting Bulletin (SAB) No. 121, replacing it with SAB 122. This update is predicted to impact Bitcoin’s price more than the upcoming U.S. Bitcoin Reserve (SBR).
Experts in the crypto space have linked the shift in accounting guidance to potential growth in institutional participation. Meanwhile, market observers expect that the new approach will reduce prior barriers for financial institutions, prompting fresh interest in digital assets and related services.
SAB 121 previously forced banks to record customer-held cryptocurrencies as liabilities, which raised both expenses and compliance burdens. This method discouraged many institutions from pursuing crypto custody services. SAB 122 eliminates that requirement, allowing banks to maintain digital assets without the earlier constraints.
Moreover, industry participants believe this change could lead to broader adoption of Bitcoin within mainstream finance. In addition, observers see the revised bulletin as an example of evolving attitudes toward digital assets among regulators and financial overseers.
Hester Peirce, an SEC Commissioner, shared her approval on social media, stating that SAB 121’s removal was a welcome development. Andrew Parish, founder of x3, indicated that this regulatory shift has more bearing on Bitcoin’s market direction than the SBR.
Rescinding of SAB 121 is a bigger catalyst for Bitcoin than the SBR.
Bookmark this post.
— Andrew (@AP_Abacus) January 24, 2025
Furthermore, Fred Krueger, creator of Troop, suggested that banks may now start accumulating Bitcoin because the old accounting obstacle is gone. Observers note that reduced accounting constraints might attract new investors who hesitated to hold digital assets under previous rules.
SAB 122 is extremely good for Bitcoin.
More significant that the Bitcoin Reserve, which is also coming.Now watch the Banks start accumulating.
— Fred Krueger (@dotkrueger) January 23, 2025
Vijay Boyapati, a former Google engineer and author of The Bullish Case for Bitcoin, described the policy change as a signal of shifting government attitudes. He observed that authorities implemented measures that limited crypto-related growth.
It really is hard to emphasize how huge a sea change we're witnessing. We went from the worst conceivable anti-Bitcoin, anti-innovation, anti-growth, anti-business administration to the most friendly Bitcoin administration you could hope for.
This is 100% not priced in. https://t.co/imQte0BwmX
— Vijay Boyapati (@real_vijay) January 24, 2025
Now, a more open administrative viewpoint seems to be emerging, which could encourage further integration of Bitcoin into established financial channels. Boyapati stressed that this development is not yet reflected in current prices, suggesting that market participants may not have accounted for its wider implications.
ETHNews analysts predict that SAB 122 may prompt banks and financial firms to reconsider their crypto strategies. Furthermore, the removal of restrictive accounting rules could stimulate trading activity and deepen liquidity in Bitcoin markets.
Observers foresee greater availability of crypto-related services, such as Bitcoin custody and digital asset brokerage, as institutions adapt. The timing aligns with broader interest in cryptocurrencies, so the SEC’s action may serve as a turning point, sparking discussions about how Bitcoin fits into modern finance.