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MicroStrategy’s crypto holdings yield $1.1 billion profit

abdelaziz Fathi

MicroStrategy, the business software company and major Bitcoin holder, has seen unrealized gains of over $1.1 billion on its Bitcoin holdings, eclipsing their cumulative investment by 25%.

Microstrategy CEO

As Bitcoin’s price crossed the $37,000 mark for the first time since May 2022, MicroStrategy’s investment resulted in impressive profits. Holding 158,400 BTC, the Virginia-based business intelligence firm has invested $4.73 billion, amounting to about 0.75% of Bitcoin’s circulating supply.

The company’s average purchase price per coin, based on its most recent acquisition on October 31, was $29,874, resulting in a gain of around 19.29% per coin at the current Bitcoin price of $36,980.

MicroStrategy’s foray into Bitcoin has not only led to substantial cryptocurrency gains but has also boosted its stock performance, with shares rising by 215% this year. Executive Chairman Michael Saylor has reiterated his belief in Bitcoin’s role as a revolutionary monetary network and a reliable hedge against inflation.

Meanwhile, the company reported a $125.8 million impairment loss on its Bitcoin holdings. This was due to the market price of Bitcoin being lower than its carrying value as of September 30, 2023. MicroStrategy remains the largest public Bitcoin holder, followed by firms like Tesla and Marathon Digital Holdings.

MicroStrategy has been known for its aggressive Bitcoin acquisition strategy, and this quarter was no exception. The company purchased an additional 6,067 Bitcoin for $167 million since the end of Q2 2023, bringing its total Bitcoin holdings to 158,400, acquired at an average price of $29,586 per coin. In October alone, the company acquired an additional 155 Bitcoin for $5.3 million.

As of the last update, MicroStrategy’s average acquisition price for its Bitcoin stash, amounting to $4.68 billion, was at $29,582. This extensive hoard of the primary cryptocurrency witnessed a bleak phase in 2022 when Bitcoin plummeted 80% from its peak in November 2021. However, the rumors around the approval of a Bitcoin ETF and the impending halving event acted as the needed tailwinds, nearly doubling the digital currency’s price this year. Specifically, MicroStrategy has reported a “paper gain” of $900 million on its 158,400 Bitcoin holdings.

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