MicroStrategy to Add to its Bitcoin Reserves Despite Q2 Loss
Global software giant, MicroStrategy has positioned itself as a Bitcoin proponent, not only by word of mouth, but in actions. It has become one of the biggest investors in the digital asset. In a new report, MicroStrategy has pledged to add to its Bitcoin reserves. As of late June, the software giant was already holding 105,085 BTC with an estimated value of $2.051 billion.
However, MicroStrategy recorded some unrealized losses on the asset over the past few months, following the market crash in May. While it registered a total loss of $689.6 million since it started accumulating Bitcoin, its loss for Q2, 2021 alone is pegged at $424.8 million. These losses are considered as paper losses since MicroStrategy is yet to trade off any of its holding since acquisition began.
In contrast, MicroStrategy has made a total of $1 billion in profits after splurging over $2 billion on the top crypto asset. The biggest contender on Bitcoin accumulation against MicroStrategy is Grayscale Investment, which reportedly owns over 650,000 BTC in its Bitcoin Trust. The latter has not backed down on amassing more of the crypto asset, too.
MicroStrategy’s CEO, Michael Saylor Equally Bullish on Bitcoin
Despite the recorded impairment loss, MicroStrategy is not resting on its oars, as it seeks to acquire more Bitcoin. Its belief in the asset is reinforced by the opinion of Michael Saylor, CEO of the software firm. Michael Saylor has been a Bitcoin proponent for a long time, promoting the asset at every opportunity he gets. His Bitcoin stance earned him a pivotal role as the head of the Bitcoin Mining Council, an organization set up to address challenges relating to Bitcoin.
EV Manufacturer, Tesla Records Some Losses on Bitcoin Reserves
Electric vehicle producer Tesla also registered a loss of $23 million on its Bitcoin reserves. In February, it had accumulated Bitcoin assets running into an estimated $1.5 billion. Later in March, Tesla sold a portion of its reserves, to test the asset’s liquidity, according to its CEO, Elon Musk. This had a negative effect on the price of the asset, including the market, generally.
Since Bitcoin is classified as ‘an intangible asset,’ rules of accounting require both firms to reveal an impairment loss when Bitcoin falls below its acquisition price. However, they are not obliged to report an increase in price until a sale is made.
Although Michaeal Saylor remains bullish on Bitcoin, he stated that if the asset’s price falls below where it is positioned currently in the next four years, he will reassess his holding strategy. Until that happens, MicroStrategy will continue accumulating Bitcoin, which is bound to have a positive effect on the asset’s price. Other institutional investors are coming in on Bitcoin as well.
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