MicroStrategy, the business intelligence giant, has finally reaped the rewards of its huge bitcoin investment after the asset’s value surged above $30,000, a level not seen since June 2022. The company began its accumulation in 2020, purchasing 140,000 BTC for around $4.17 billion, and is now experiencing paper profits for the first time in a while.
Finally in the Green
As Bitcoin’s price rose above $30k, many individuals and entities who invested during the market decline in recent months welcomed the surge. One of these entities is MicroStrategy, the corporation that holds the largest amount of bitcoin. MicroStrategy has accumulated the BTC over time, making its last purchase of 1,045 BTC for almost $30 million last week, at an average valuation of $29,803 during the period from August 2020 to early April 2023, with a total distribution of $4.17 billion.
MicroStrategy remained bullish on the asset despite price fluctuations throughout 2022 and significant declines during the Terra crash and the FTX meltdown. Even when Bitcoin’s value plummeted following the LUNA/UST collapse, Executive Chairman Saylor was unfazed, stating that the asset’s price is set by individuals with less knowledge but more money and that «In time, they will get the knowledge, and you will get the money.»
MicroStrategy can now sit back and enjoy approximately $30 million in paper profit as a result of Bitcoin’s recent rise above $30,000.
The Dramatic Past Few Months
MicroStrategy’s lackluster Q4 performance was affected by Bitcoin’s decline towards the end of 2022. The company posted a net loss of nearly $250 million, with its revenue falling to $132.6 million, below the estimated figures, and incurred an impairment charge of $197.6 million on its BTC holdings during that period. This was a significant increase from Q3, where the sum was a mere $727,000.
It is important to note that MicroStrategy shifted its non-selling bitcoin strategy towards the end of 2022, selling 704 BTC to generate tax benefits.
This year has been different; the company purchased larger amounts of the cryptocurrency during several occasions, saw its investment’s valuation rise and repaid its $205 million loan to failed Silvergate Bank at a 22% discount.