Software program agency MicroStrategy not too long ago reported a web loss for the primary quarter of 2022, which seems to be pushed largely by its Bitcoin holdings.
The agency reported a web lack of $170 million, or $11.58 per share for Q1, barely decrease than $183.2 million final 12 months. A bulk of that loss was pushed by a digital asset impairment cost of $170.1 million, as the worth of its Bitcoin holdings fell.
MicroStrategy has the biggest Bitcoin holdings amongst any publicly listed firm, with about 129,218 tokens held at a complete market worth of $4.9 billion. The determine represents practically two-thirds of the agency’s complete belongings.
The agency is owned by common Bitcoin maximalist Michael Saylor.
MicroStrategy is holding Bitcoin at a loss
The software program developer mentioned in a press release that the carrying worth of its Bitcoin is almost $3 billion, reflecting a cumulative impairment lack of over $1 billion since acquisition.
The common price of every Bitcoin held by MicroStrategy is about $30,700- properly under present market ranges of about $38,000. The worth is even under Bitcoin’s lowest stage this 12 months, of round $33,000. Provided that MicroStrategy’s knowledge is barely until March 31, it doesn’t mirror the practically 20% drop in Bitcoin costs by April.
The agency had purchased 4,167 tokens in March at a mean worth of $45,714 per Bitcoin. As of Might 4, it has misplaced roughly $38 million on that funding.
Weak point on this planet’s largest cryptocurrency is prone to weigh additional on MicroStrategy’s stability sheet.
Saylor doesn’t seem like secretly promoting BTC
MicroStrategy’s outcomes present that no less than till March 31, accusations of secret Bitcoin selling by Saylor seem like unfounded. Saylor has denied the allegations, and has maintained his rhetoric on Bitcoin adoption.
However given the losses it has on its Bitcoin holdings, the agency might face strain from shareholders to start promoting Bitcoin to enhance its profitability. This state of affairs might come into play if Bitcoin costs fall additional. The agency can also be leveraging debt in opposition to its Bitcoin purchases, making it extra prone to dropping cash.
Nonetheless, there seems to be no indication from MicroStrategy or Saylor that it intends to promote tokens. MicroStrategy additionally mentioned it may explore more opportunities with its Bitcoin that it not tied to debt- roughly 95,000 tokens.
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