Updated 03 Aug, 2021

MicroStrategy to Continue Bitcoin Purchases Despite Recent Slump

MicroStrategy to Continue

Key Takeaways:

  • MicroStrategy published its earnings figures for the second quarter
  • The company has reported an impairment loss of $689.6 million from its Bitcoin holdings

Business intelligence firm MicroStrategy to continue its “digital asset strategy” for the months ahead, CEO Michael Saylor confirmed in the company’s corporate earnings report for the second quarter.

MicroStrategy Posts a Bitcoin-related Impairment of $689.6 Million

The Virginia-based company, famous for its bitcoin acquisitions over the year, has now hoarded more than 105,000 bitcoins. The cryptocurrency holdings constitute over 70% of the firm’s market capitalization. These holdings had carrying value of $2.051bn on the final day of the quarter ended June. The figures reflected “cumulative impairment losses of $689.6 million since acquisition. And an average carrying amount per bitcoin of approximately $19,518,” according to the earnings statement.

The non-GAAP (generally accepted accounting principles) is the calculation of the market value of MicroStrategy’s bitcoin holdings. On the last day of the quarter, it was $3.65 billion. The value reflected all 105,085 bitcoins held by the company, each at the time worth $34,763. The non-GAAP bitcoin cost basis was $2.74 billion, or $26,080 per bitcoin, according to the company’s figures released for the quarter.

The Company Pledges to Continue Buying Bitcoin

“We continue to be pleased by the results of the implementation of our digital asset strategy,” Michael Saylor said in the report. “Our latest capital raise allowed us to expand our digital holdings, which now exceed 105,000 bitcoins. Going forward, we intend to continue to deploy additional capital into our digital asset strategy.”

Overall, the company reported $125.4m in revenue for the quarter, an increase by 13.4% from the same quarter a year earlier.

MicroStrategy has been increasingly tied to bitcoin since August last year when the company made its first bitcoin purchase. Since then, the Michael Saylor-led tech firm is becoming more popular for its bitcoin gathering activity, rather its software developments capabilities.

In a recent interview with CNBC, Mr. Saylor mentioned the company has amassed as much as $2.2bn in debt, a large part of which has been converted into bitcoin kept on MicroStrategy’s balance sheet.