The Crypto Compass: Asset Flow Insights, Unpacking Grayscale’s SEC Saga, Visa’s Solana Strategy, and the New Era of Crypto Accounting

MV Global
10 min readSep 7, 2023



The digital financial landscape is undergoing transformative shifts, with cryptocurrency at the forefront of this evolution. From the regulatory battles surrounding Bitcoin ETFs to seismic changes in accounting principles for crypto assets, these developments signify the maturing intersection of traditional finance and digital assets. This report delves into four pivotal stories that encapsulate these changes: the cooling of digital asset investments amidst surging trading volumes, Grayscale’s ongoing tussle with the SEC, Visa’s innovative foray into the Solana blockchain, and the groundbreaking decision by the U.S. Financial Accounting Standards Board. Each narrative sheds light on the intricate dance between innovation, regulation, and adoption in the crypto realm. Join us as we unpack these stories, offering insights into the future trajectory of the digital financial world.

Digital Asset Flows: A Tale of Ebbs, Flows, and Regulatory Hopes


The Overall Landscape

Digital asset investment product flows have shown a cooling trend recently, with minor outflows recorded at US$11.2 million. This continues the prevailing sentiment over the past seven weeks, which has seen cumulative outflows amounting to US$342 million. However, 2023 has been marked by significant fluctuations in investor flows. It’s evident that investor sentiment has been significantly swayed by the ongoing regulatory discourse surrounding digital assets. A case in point was the previous week, which started with high investor hopes for a U.S. spot ETF approval. However, these aspirations were later dampened by the announcement of a delay in the decision-making for other spot ETF applications.

Trading Volume Surges

Despite the subdued nature of investment flows, trading volumes told a different story. The past week witnessed trading volumes spiking to US$2.8 billion, a substantial 90% above the year-to-date average. This surge underscores the heightened activity and interest in the crypto space, even as net investment flows remain conservative.

The Bitcoin Narrative

Bitcoin, the digital gold standard, experienced inflows amounting to US$3.8 million. In contrast, short bitcoin positions faced a withdrawal for the 19th consecutive week, with outflows reaching US$3.3 million. As a result, the total assets under management (AuM) for short bitcoin positions have plummeted by 48% from this year’s zenith.

Altcoins: The Mixed Bag

Altcoins presented a mixed picture. Polygon and Ethereum, two of the leading altcoin contenders, saw outflows of US$8.6 million and US$3.2 million, respectively. On the other hand, Solana continued its bullish trend, marking inflows for the ninth straight week, totaling US$0.7 million. This consistent inflow, with year-to-date numbers touching US$26 million, cements Solana’s position as the current darling among altcoin investors.

Blockchain Equities: A Shift in Sentiment

Blockchain equities, representing stocks of companies engaged in blockchain-related activities, have been facing headwinds. The sector recorded outflows for the fourth consecutive week, amounting to US$25 million.


The crypto market’s ebb and flow continue to be influenced heavily by regulatory anticipations and decisions. As the ecosystem matures and seeks more mainstream adoption, the interplay between regulatory developments and investor sentiment will remain a focal point for market watchers.

Grayscale’s Triumph and the Ripple Effect on Bitcoin Spot ETFs


Revisiting Grayscale’s Tussle with the SEC

In a decisive move that could reshape the future of Bitcoin exchange-traded funds (ETFs), the U.S. Court of Appeals for the D.C. Circuit sided with Grayscale Investments. This verdict overruled the Securities and Exchange Commission’s (SEC) prior rejection of Grayscale’s Bitcoin Trust ($GBTC) conversion into a spot ETF. The SEC had previously turned down the application, expressing concerns over its potential to prevent “fraudulent and manipulative acts and practices.” Grayscale, however, did not back down and retaliated with a lawsuit, pointing out the SEC’s inconsistency in its regulatory decisions.

Grayscale’s argument, backed by lawyers from Davis Polk and Munger Tolles & Olson, was simple yet compelling. They emphasized the SEC’s previous approval of Bitcoin futures ETFs and highlighted the inherent contradiction in rejecting Grayscale’s spot ETF application. Circuit Judge Neomi Rao echoed this sentiment, labeling the SEC’s decision as “arbitrary and capricious.”

The Implications of a Spot Bitcoin ETF

A spot Bitcoin ETF serves as a conduit for mainstream investors, allowing them to gain exposure to Bitcoin without directly owning the cryptocurrency. Grayscale’s Bitcoin Trust, a titan in the sector with over $16 billion in assets, currently trades at a discount to its actual Bitcoin holdings. Legal representatives from Grayscale argue that transitioning to an ETF structure could address this disparity, a sentiment reflected in the trust’s narrowing discount post the court’s verdict.

Furthermore, Grayscale suggests that their spot Bitcoin ETF would employ the same market surveillance collaboration with the Chicago Mercantile Exchange (CME) that the SEC previously deemed adequate for Bitcoin futures ETFs. The court’s agreement with this stance places additional pressure on the SEC to justify its earlier rejections.

The Broader Market Reaction

The immediate aftermath of this landmark decision was palpable in the market. Bitcoin’s price surged by 8%, a testament to the burgeoning optimism. This sentiment was further amplified with Coinbase, earmarked as the custodian for Fidelity and BlackRock’s ETFs, experiencing a 16% hike in its stock value. The overarching narrative suggests a shift in regulatory winds, with institutions like Coinbase poised to benefit immensely.

Additionally, there’s an undercurrent of anticipation about how the SEC will navigate this revised landscape. Although the court’s ruling doesn’t guarantee a direct approval for a spot Bitcoin ETF, it certainly paves the way for further spot ETF applications. As the SEC grapples with providing consistent and clear regulations, the market remains optimistic about a more inclusive and transparent regulatory framework on the horizon.

The Road Ahead for Grayscale and the Crypto Community


Mid-October is gearing up to be a tumultuous period for the market. The SEC’s 45-day window to request a rehearing in the Grayscale case aligns with pivotal events such as the next deadline for spot-based ETF filings and the ultimate cut-off for the futures-based Ether ETFs. With these concurrent developments, market volatility is expected.

With the court’s decision serving as a potential inflection point, the next week is crucial for determining the fate of the spot Bitcoin ETF. The SEC may choose to defer its decision, but the Grayscale ruling limits its grounds for further rejections. Grayscale, on its part, remains poised and prepared to transition its Bitcoin Trust into an ETF.

Visa Ventures into Solana for Stablecoin Settlements



Visa, a long-standing giant in the payment industry, has recently extended its operations into the crypto space. Traditionally, Visa’s payment infrastructure is at odds with the Ethereum network due to high transaction fees, which is why the company has been exploring alternative solutions.

Key Developments:

Integration with Solana: Visa has announced its integration with the Solana blockchain, known for its relatively minuscule transaction fees (averaging $0.0002 in Q2). This move facilitates the settlement of USDC payments on Solana’s network. USDC is the second-largest stablecoin, and its integration on an efficient blockchain like Solana signifies an essential step forward for stablecoin payments.

Merchant Acquirers: These entities play a pivotal role in the payments system, ensuring that funds from customer transactions reach business bank accounts. Visa’s unique approach involves working directly with merchant acquirers, such as Worldpay and Nuvei, streamlining the payment process. By settling in USDC, retailers can receive payments almost instantly, sidestepping the typical waiting period associated with traditional banking systems.

Challenges and Future Prospects: Despite Visa’s groundbreaking work, a significant challenge remains: the need to incentivize consumers to hold and transact in USDC. A potential solution could be the development of an appealing consumer app that rewards users in USDC, encouraging further use of the stablecoin for transactions.

Market Impact:

Solana’s Boost: Following the announcement of Visa’s integration, Solana’s native token, SOL, experienced a surge, marking an increase of over 4%. This rise is particularly noteworthy given that other major cryptocurrencies, such as Bitcoin and Ethereum, remained relatively stable.

Visa’s Previous Experiments: Visa’s exploration into the crypto space is not entirely new. Since 2021, the company has been investigating the potential of USDC within its treasury operations. The aim has been to optimize cross-border payments, making currency conversion faster and more cost-efficient.

Stablecoins’ Potential: Bernstein, a major research firm, has highlighted the potential of stablecoins in the crypto ecosystem. They foresee stablecoins becoming a dominant force in the market, estimating their value to reach nearly $3 trillion in the next half-decade. Their prediction also includes major financial platforms issuing co-branded stablecoins to bolster their platforms’ value exchange.


Visa’s recent move into the Solana ecosystem underscores the evolving landscape of digital payments. By bridging the gap between traditional payment infrastructures and innovative blockchain solutions, Visa is paving the way for a more efficient and inclusive financial future. This initiative not only endorses the capabilities of blockchains like Solana but also accentuates the growing significance of stablecoins in the global financial scene.

Accounting Shift: A New Dawn for Crypto on Corporate Balance Sheets



In a groundbreaking move that could redefine corporate crypto interactions, the U.S. Financial Accounting Standards Board (FASB) has unanimously given the green light for companies to report their cryptocurrency holdings at fair market value. This decision comes after months of deliberation and could usher in a new era of transparency and clarity for crypto assets on corporate balance sheets.

The FASB’s Crucial Decision:

Setting the pace for entities adhering to the U.S. Generally Accepted Accounting Principles (GAAP), the FASB’s recent decision has been the result of a meticulous process. Earlier this year, in March, the board had issued a call for comments on potential changes to the FASB Accounting Standards Codification. After thorough discussions and feedback, the board put the proposal to vote on Sept. 6, culminating in its unanimous approval.

Unpacking ‘Fair Value’:

At its core, ‘fair value’ represents the estimated price of an asset, factoring in its current market value along with other pivotal determinants. The FASB’s “tentative” decision last October to employ fair value accounting for crypto assets has now been solidified, marking a significant shift in how businesses interact with digital currencies.

Comparing Old and New:

Traditionally, companies were compelled to retain impairment losses from crypto — encountered when an asset abruptly diminishes in value — on their balance sheets, even if the digital asset later rebounded in worth. This approach often posed challenges, especially during volatile market phases. However, the new directive allows companies to reflect financial recoveries from rising crypto prices, offering a more accurate representation of their financial health.

Implications and Reception:

While the new rule promises greater clarity, it might also introduce heightened volatility to the earnings of firms with vast crypto holdings. Yet, the ability to chronicle financial rebounds from surging crypto valuations is a significant upside. Many companies can even opt to implement this fair-value accounting for their crypto assets immediately, should they choose to.

Christine Botosan, a member of the FASB, aptly encapsulated the sentiment, stating, “It’s not very often that we can both take cost out of the system and improve the decision usefulness of information.” Her words underscore the board’s optimism and confidence in this transformative change.

Broad Spectrum Impact:

The ripple effects of this decision won’t just be felt by crypto-native enterprises like Coinbase. Investment giants and corporations with hefty crypto assets, including the likes of MicroStrategy and Tesla, stand to benefit immensely. Michael Saylor, MicroStrategy’s chairman, took to social media, labeling the accounting upgrade as a monumental stride towards bolstering corporate adoption of Bitcoin as a treasury asset.

Moreover, MicroStrategy, since initiating its Bitcoin acquisition strategy in 2020, has reported substantial impairment losses. But with the new FASB rule in place, such negative optics might soon be a thing of the past, fostering a more accurate and positive representation of the company’s intrinsic value.

The Road Ahead:

As the FASB gears up to officially publish these rules by the end of 2023, with activation slated for 2025, the corporate world watches with bated breath. The rules, while transformative, also signal a wider acceptance and understanding of cryptocurrencies within the traditional financial ecosystem, hinting at an exciting confluence of the old and the new in the years to come.


As the chapters of the crypto narrative unfold, a common theme emerges: the persistent drive towards integration, clarity, and broader adoption. Whether it’s Grayscale’s legal victories pointing to a more inclusive ETF environment or Visa’s strategic maneuvers into the Solana ecosystem, the boundaries between traditional finance and the decentralized world are becoming increasingly porous. The FASB’s landmark decision to reframe crypto accounting practices epitomizes this convergence, signaling a future where digital assets occupy a central role in corporate balance sheets. Yet, as we navigate these waters, the undercurrents of regulatory challenges and market volatilities serve as reminders of the dynamic nature of this domain. The compass may swing in various directions, but the destination seems clear: a financial landscape where crypto is not just an adjunct but a mainstay. As we gear up for the next wave of developments, one thing remains certain — the journey of crypto integration is as compelling as its promise.