MicroStrategy, a business intelligence firm, is celebrating after their Bitcoin investment finally turned a profit. The investment was made between August 2020 and early April 2023, at an average valuation of $29,803, for a total of $4.17 billion spent on Bitcoin, media reports said.
At the moment of publishing this news, Bitcoin’s price surged past $30,000 for the first time since June 2022, generating a paper profit of approximately $30 million for MicroStrategy. The firm’s 140,000 BTC stash is the largest public holding of Bitcoin in the world.
This announcement comes at a time when the cryptocurrency market is soaring. Bitcoin’s recent price increase has encouraged many individuals and entities to increase their exposure to digital assets. MicroStrategy remained bullish on Bitcoin despite its fluctuations in 2022, including the severe decline during the Terra crash and the FTX meltdown.
During that time, MicroStrategy sat on nearly $320 million of unrealized losses after Bitcoin plunged following the LUNA/UST collapse. But true to their commitment, Executive Chairman Michael Saylor remained unfazed, stating: “The Bitcoin price is set by those with more money and less knowledge than you. In time, they will get the knowledge, and you will get the money.”
The end of 2022 saw MicroStrategy’s poor performance, with a net loss of almost $250 million, and a revenue drop to $132.6 million (lower than the estimated figures). In addition, the company incurred an impairment charge of $197.6 million on its BTC holdings during that period. However, the trends in 2023 seem to be entirely different.
MicroStrategy repaid its $205 million loan to the failed Silvergate Bank at a 22% discount, and apart from purchasing amounts of Bitcoin on several occasions and seeing its investment’s valuation rise, the firm has seen a significant upswing in the market.
Bitcoin’s recent price surge is not the only thing that’s going right for MicroStrategy. The firm recently acquired AI-powered cybersecurity start-up, ZeroFOX, for $422.5 million in cash and Bitcoin. The deal is expected to strengthen the company’s position in the growing market of cybersecurity solutions.
With the growing interest in Bitcoin and the cryptocurrency market, experts predict that MicroStrategy’s Bitcoin stash could continue to rise in value. The cryptocurrency market is volatile, and it’s hard to predict what will happen in the future. However, with Bitcoin’s recent surge and MicroStrategy’s commitment to holding their investment long-term, the future looks bright for the business intelligence firm.
