MicroStrategy aims to buy more BTC despite a loss of $424.8 million
At a time when Bitcoins have fluctuated almost magically, mobile software firm MicroStrategy has pledged to get hold of more BTC. It’s a hugely surprising step because the firm has already reported impairment losses amounting to $424.8 million in Q2.
However, the loss is only paper-based, not a realized one, owing to the BTC prices at the end of the second quarter. It is notable that MicroStrategy has earned a billion dollars more than it spent on BTC. Michael Saylor, its CEO, has shown genuine belief in Bitcoins, stating in the report that the company continues to be content with its digital asset strategy implementation. He agreed that the latest capital had allowed the company “to expand digital holdings”, exceeding 105,000 bitcoins at present. He expressed sticking to BTC for this reason, saying that MicroStrategy “intends to continue to deploy additional capital” into its digital asset strategy building.
As of June 30, 2021, MicroStrategy held approximately 105,085 BTC with $2.9052 billion as its carrying capacity, and an impairment loss of $689.6 million since acquisition. Additionally, the average carrying amount per BTC was estimated at $19,518.
MicroStrategy’s digital asset was calculated by using the Generally Accepted Accounting Principles (GAAP) methodology, which is a repository of the most commonly accepted accounting rules implemented in financial reporting. The firm has also mentioned non-GAAP calculations that exclude the “impact of share-based compensation expense and impairment losses and gains on sale from intangible assets.”
The non-GAAP figures show a difference in MicroStrategy’s digital holdings, including a BTC cost basis of $2.741 billion, whereas its market value is $3.653 billion, reflecting an average cost of one BTC at $26,080 and its market price as $34,763.
Saylor appears to be all for Bitcoin at the current stage as they have continued to hold the asset despite crypto’s downturn in May. It appears the company’s strategy is to hold the asset for the long term.