MicroStrategy Reportedly Loses $1.8 Billion as Crypto Prices Fall

According to reports, MicroStrategy has unrealized losses on its Bitcoin investment at over $1.8 billion. The company has no plans to sell its shares since it considers bitcoin to be a better investment than cash or gold.

According to reports, MicroStrategy Inc., the largest corporate Bitcoin holder, is sitting on unrealized losses from its acquisitions of $1.8 billion. The software firm with headquarters in Tysons Corner, Virginia, and its affiliates now control about 130,000 Bitcoin, valued at about $2.2 billion at the time of writing. Each Bitcoin cost around $30,369. The total cost of the Bitcoins purchased was close to $4 billion. The corporation is now $1.8 billion in the hole as a result.

HODL, HODL, HODL

Michael Saylor, the executive chairman, had declared that the business will never sell its Bitcoin. The corporation is sitting on large paper losses as a result of its unwillingness to sell. Additionally, the business incurred an impairment charge of $917.8 million after reporting losses resulting from the fall in the price of bitcoin earlier this year.

Since Bitcoin is categorized by MicroStrategy as an intangible asset, any decline in its value must be permanently recorded as a loss. If it decides to sell its Bitcoin, it must notify the Internal Revenue Service of any capital gains.

After MicroStrategy revealed $1 billion in losses in August 2022, Saylor resigned as CEO to concentrate on the business’s Bitcoin strategy. Since then, the business spent its extra $6 million buying 301 Bitcoins in September 2022. Since then, the average price of Bitcoin has dropped by roughly 15%, meaning that its total purchase of 301 Bitcoins is already underwater.

Saylor Calls for Regulatory Guidance

Saylor stated in an interview with CNBC that the sudden demise of FTX is both beneficial for Bitcoin and disastrous for the cryptocurrency market. Bitcoin is a commodity that can be self-custodied, as opposed to tokens on exchanges, he claimed. He also added that regulators need to provide clear guidance on how to register a digital security, a digital currency, a digital token and your digital exchange.