MicroStrategy Continues to Expand its Bitcoin Holdings
Software company MicroStrategy has recently announced that it has purchased an additional 6,067 Bitcoins for $167 million, bringing its total holdings to 158,400 Bitcoins. The company has been actively acquiring Bitcoin and now has a total investment of $4.69 billion, with an average cost of $29,586 per coin.
The latest purchase includes the acquisition of 155 Bitcoins for $5.3 million in October. MicroStrategy’s chairman, Michael Saylor, revealed this information. The company’s Chief Financial Officer, Andrew Kang, stated that their commitment to acquiring and holding Bitcoin remains strong, especially with the potential for increased institutional adoption.
This purchase comes at a time when the cryptocurrency market is experiencing a rally. Bitcoin reached a record price for the year at $35,878 on Wednesday night according to CoinGecko. As of now, Bitcoin is trading at $35,332 and has seen a 72.5% increase since the beginning of the year.
MicroStrategy Reports Widening Net Loss
In its third-quarter earnings report, MicroStrategy recorded a 3.3% increase in revenue to $130 million. However, the company also posted a net loss of $143.4 million, significantly worse than the net loss of $27 million in the same period last year.
During the quarter, MicroStrategy recognized an impairment loss of $125.8 million on its Bitcoin holdings as the market price was lower than its carrying value as of September 30, 2023. The company explained that changes in the valuation allowance on its deferred tax asset related to the impairment on its Bitcoin holdings contributed to a provision for income taxes.
MicroStrategy’s Position in Bitcoin
MicroStrategy initially purchased Bitcoin in August 2020 and currently holds approximately 0.75% of Bitcoin’s circulating supply. The company’s stock price was trading at around $426 at the closing bell on Wednesday, reflecting a 29% increase over the past month.
Hot Take: MicroStrategy Continues to Lead Corporate Bitcoin Investments
MicroStrategy continues to solidify its position as one of the most aggressive corporate buyers of Bitcoin. With its recent purchase of an additional 6,067 Bitcoins, the company now holds a total of 158,400 Bitcoins worth $4.69 billion. This investment strategy aligns with their belief in the potential for increased institutional adoption of Bitcoin.
Despite reporting a widening net loss in its third-quarter earnings report, MicroStrategy remains committed to its Bitcoin holdings. The company recognizes the market volatility and has experienced an impairment loss on its Bitcoin stash. However, this hasn’t deterred MicroStrategy from actively acquiring more Bitcoin and expanding its position in the cryptocurrency market.
As the cryptocurrency market continues to rally, MicroStrategy’s investments in Bitcoin may prove to be lucrative in the long run. With their significant holdings and commitment to this digital asset, MicroStrategy is positioning itself as a key player in the evolving landscape of cryptocurrencies.
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