MicroStrategy’s Bitcoin stash is back in profit with BTC price above $30K

October 23, 2023 Coin Telegraph

<div>MicroStrategy's Bitcoin stash is back in profit with BTC price above K</div>

bitcoin etf

The Michael Saylor-led software firm has made $132 million in unrealized profits from its Bitcoin bet.

MicroStrategy's Bitcoin (BTC) holdings have turned profitable for the first time since July this year as the BTC price has broken through above $30,000.

MicroStrategy up $132M in paper profits

As of Oct. 23, MicroStrategy held 158,245 BTC worth $4.847 billion, up about $132 million from the original amount invested — at an average rate of 29,870 per BTC. In other words, the firm is now up at least $130 per coin.

*MicroStrategy Bitcoin holdings as of Oct. 23. Source: BlockchainCenter.Net*

MicroStrategy started buying Bitcoin in 2020. The firm ramped up purchases in 2023 as BTC's price recovered from extreme losses caused by the Federal Reserve's rate hike policy and high-profile crypto bankruptcies and implosions.

In September 2023, MicroStrategy acquired 5,444 BTC by raising an equivalent amount of capital, mirroring the approach that saw the firm buying approximately 12,333 Bitcoin by raising funds earlier this year.

Michael Saylor, the co-founder and chairman of MicroStrategy, shared data showing Bitcoin's outperformance versus traditional assets since the company adopted its cryptocurrency-buying strategy in August 2020.

*Bitcoin vs. S&P 500, Nasdaq, Gold, Silver, and Bond returns since August 2020. Source: Michael Saylor/X*

Will Bitcoin price rise further into 2024?

Since May 2022, Bitcoin has failed to establish a clear bullish momentum after crossing $30,000. This scenario may repeat in the coming weeks. This, in turn, risks pushing MicroStrategy's BTC investment below its average buying price once again.

BTC/USD daily price chart. Source: TradingView

More downside cues come from Bitcoin's daily relative strength index (RSI), now at its most overbought levels since January 2023. As a rule of technical analysis, an overbought RSI (above 70) could prompt BTC price to drop or consolidate sideways.

A correction scenario will see Bitcoin's price head toward its 50-day exponential moving average (50-day EMA; the red wave) near $27,720 in November, down about 10% from current levels.

Conversely, maintaining and confirming $30,000 as the new support level will open the door toward the next big resistance area at $32,000 — a level not seen since May 2022.

From a fundamental perspective, a potential Bitcoin exchange-traded fund (ETF) approval in the U.S. serves as a strong bullish backdrop, according to CryptoQuant. It notes that the approval of a Bitcoin ETF can boost the Bitcoin market's net capitalization by $155 billion.

In turn, the price of each Bitcoin would hit $50,000-73,000 in 2024, which would certainly become a boon for MicroStrategy, though the firm says it will stay on its BTC course even if the Bitcoin ETF get the green light.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Microstrategy Buys More Bitcoin — Company’s Crypto Holdings Grow to 132,500 BTC

December 29, 2022 Bitcoin.com

Microstrategy Buys More Bitcoin, Now Holding 124,391 BTC

December 30, 2021 Bitcoin.com

MicroStrategy added 9,000 BTC last quarter, its stash is now worth $7 billion

October 29, 2021 Coin Telegraph

MicroStrategy added 9,000 BTC last quarter, its stash is now worth billion

Bitcoin

As of Sept. 30, MicroStrategy held 114,042 BTC at an average purchasing price of $27,713.

MicroStrategy added almost 9,000 Bitcoin to its holdings in Q3, bringing its total BTC stash to a valuation of around $7 billion.

The company highlighted the purchase of 8,957 BTC in its Q3 report on Oct. 28, with the firm’s perma-bull CEO Michael Saylor stating that there is more BTC accumulation to come:

“Today, MicroStrategy is the world’s largest publicly traded corporate owner of Bitcoin with over 114,000 Bitcoins. We will continue to evaluate opportunities to raise additional capital to execute on our Bitcoin strategy.”

The software firm has increased its Bitcoin holdings by 198% since the same period last year, and as of Sept. 30 the total stood at 114,042 BTC with an estimated average purchasing price of $27,713 per coin, or a total spend of $3.16 billion.

On paper, Microstrategy posted a carrying value of $2.406 billion for its BTC holdings at an impairment loss of $754.7 million since the acquisition, however this is a paper loss.

As the firm categorizes Bitcoin as an “intangible asset,” accounting rules mandate that it must report an impairment loss when the carrying value dips below its cost basis. However, the firm is not required to report any paper gains on the asset until a profit is realized through a sale.

As BTC is priced at roughly $60,600 at the time of writing, the value of MicroStrategy’s holdings equates to around $6.9 billion, suggesting that the firm would make nearly $3.75 billion in profit if it sold today.

MicroStrategy provides business intelligence software, mobile app software and cloud-based solutions, and the firm pulls in revenue via streams such as product licensing and subscription services.

The firm reported $128 million worth of total revenue for the quarter, beating the Zacks Consensus Estimate by 0.39% and marking a 0.5% increase compared to MicroStrategy’s Q3 results from 2020.

While Micostrategy’s revenue squeaked past estimates, the firm posted earnings of $1.86 per share compared to the forecast $1.12 per share. The investment research firm highlighted yesterday that MicroStrategy has surpassed consensus estimates three times “over the last four quarters.”

“This quarterly report represents an earnings surprise of 66.07%. A quarter ago, it was expected that this business software company would post earnings of $0.73 per share when it actually produced earnings of $1.72, delivering a surprise of 135.62%,” said Zacks Investment Research.

Saylor highlighted in the report that “overall demand” for the MicroStrategy platform and growing adoption of the firm’s cloud-based solutions contributed to the firm’s strong performance in Q3.

The firm posted a gross profit of $105.7 million for the quarter, with the figure tallying in the same as the year before. Net loss for the quarter was $36.1 million, or $3.61 per share compared to the loss of $14.2 million or $1.48 per share in Q3 2020.

Earlier today, Saylor reiterated his bullishness for digital gold by stating that “you do not sell your Bitcoin” as he retweeted his own post from October 2020 revealing personal holdings of 17,732 BTC.