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MicroStrategy’s Bitcoin conviction ‘strong’ as it posts Q1 profit

MicroStrategy’s Bitcoin conviction ‘strong’ as it posts Q1 profit

Business intelligence platform MicroStrategy has reaffirmed its dedication to its Bitcoin (BTC) investment strategy after generating its first quarterly profit since 2020.

In the first quarter of 2023, the company, which was founded by Michael Saylor, returned to profitability with a $94 million profit, largely due to a one-time income tax benefit of $453.2 million. The company also generated $121.9 million in revenue, up 2.2% from the same period the year before.

The CEO of MicroStrategy, Phong Lee, said in a statement on May 1 that the company’s “conviction” in its Bitcoin (BTC) investment strategy remains “strong”:

“The conviction in our Bitcoin strategy remains strong as the digital asset environment continues to mature.”

“We will remain disciplined on costs while investing in growth, and we will continue to execute our dual strategy of growing our business intelligence software business and acquiring Bitcoin for the future,” he added. Lee also stressed that its “core business” is not impacted by short-term fluctuations in the price of BTC.

Saylor, who serves as MicroStrategy’s chairman, attributed the successful quarter to the company’s sharp execution in its core business model and its Bitcoin investment thesis, which he described as the “right strategy.” He added:

“So ultimately, it’s not easy to see what better strategy there might be. And so, we are strong proponents of a Bitcoin strategy. And as you can see from this chart, simply acquiring and holding Bitcoin in a prudent fashion is a pretty good way to outperform the market.”

The Bitcoin advocate predicted that investors will soon exit their positions on crypto assets that are “under the microscope in the regulatory environment,” which in turn will “flow into Bitcoin.”

According to previous filings with the SEC, the company bought 7,500 BTC in the first quarter of the year across two purchases on March 23 and April 5 for a total of $179 million. The firm now holds 140,000 BTC, which were collectively purchased at an average cost of about $29,803.

MicroStrategy’s Bitcoin investment has been impacted by the recent volatility of the cryptocurrency market. Despite this, Saylor remains committed to the investment strategy and recently shared a chart on Twitter outlining the steady accumulation of BTC by MicroStrategy since adopting its Bitcoin strategy. In addition to accumulating BTC, the company is also developing a Lightning Network-based Software as a Service tool for corporations.