Why MicroStrategy Is Still Buying Bitcoin Despite $53 Million Loss?

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As a crypto investor with experience in following MicroStrategy’s Bitcoin buying strategy, I believe the company’s determination to continue collecting Bitcoins is rooted in their strong belief in the digital asset’s potential as a long-term investment. Despite the recent $53 Million loss reported in Q1, the company remains committed to its Bitcoin acquisition strategy.

MicroStrategy, a leading business intelligence and analytics software company, has become renowned for amassing significant quantities of Bitcoin over the years. With a commitment that extends far into the future, the firm has vowed to persistently acquire Bitcoins valued in billions.

As a crypto investor, I’ve recently noticed that MicroStrategy reported a loss of $53 million. However, their commitment to amassing Bitcoin remains unwavering. In this blog post, let’s delve into the reasons why MicroStrategy continues to invest in Bitcoin.

MicroStrategy Reported $53 Million Losses In Q1

As a researcher examining MicroStrategy’s recent financial announcements, I discovered that the company reported a net operating loss of $3.09 per share, equating to a total loss of approximately $53 million. The primary contributor to this loss was identified as a digital asset impairment charge amounting to $191.6 million. Furthermore, the reports disclosed a total revenue of $115.2 million, representing a 5% decrease in comparison to the previous year’s figures.

As a crypto investor, I can tell you that MicroStrategy chose not to adopt the latest digital asset accounting standard in the first quarter of 2024. This decision meant they continued using previous accounting rules for calculating their Bitcoin holdings’ fair value. According to these outdated standards, the price of Bitcoin was set at $23,680, resulting in a total holding valued at approximately $5.1 billion instead of the March closing value of $71,028. This difference would have significantly increased MicroStrategy’s Bitcoin holdings’ worth to around $15.2 billion.

Andriew Kang, MicroStrategy’s CFO, has announced that the company intends to implement the latest digital asset fair value accounting standard ahead of schedule. He thinks this is an opportune moment to make the transition. It’s worth noting that the Financial Accounting Standards Board (FASB) plans to enforce this rule from January 2025, but MicroStrategy may adopt it earlier as well.

Why MicroStrategy Is Still Buying Bitcoin?

Despite a drop in Bitcoin’s value, MicroStrategy persisted in amassing more Bitcoins and now owns over 214,000 BTC. Approximately 122 BTC were obtained during April 2023. This current stash is valued at roughly $13.58 billion based on the present Bitcoin price of around $63,355. In total, MicroStrategy has purchased approximately 25,250 Bitcoins for about $1.65 billion, with an average purchase price of around $65.232 per coin.

For approximately four years, MicroStrategy has been amassing Bitcoins as part of its investment strategy, with the first purchase made in August 2020. Initially, this move was aimed at shielding against inflation and holding valuable assets instead of cash. However, as time passed, the company’s focus shifted more towards Bitcoin investing. MicroStrategy’s CEO, Michael Saylor, emerged as a strong proponent for Bitcoin and frequently expressed his views on its financial merits during various speaking engagements.

As a crypto investor, I’ve been actively building my Bitcoin (BTC) holdings for several years now. To achieve this, I’ve invested over $7 billion in total, with the ultimate goal of diversifying my investment portfolio and reaping long-term benefits from the unique opportunities presented by this digital asset class.

Conclusion

Currently, MicroStrategy’s initial $7 billion investment in Bitcoin has grown to a value of $13.58 billion. If the anticipated bull run causes Bitcoin’s price to reach $100,000 as analysts forecast, the resulting profit from this investment would be substantial and hard to fathom.

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2024-04-30 11:28