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bitcoin loss

The company also booked a loss of $34 million on its first-ever Bitcoin sale last quarter but said it was conducted to harvest a tax loss.

Software analytics company MicroStrategy recorded a paper loss of over a billion dollars on its Bitcoin (BTC) holdings in 2022 but says it has no plans to stop trading the digital asset.

MicroStrategy released its 2022 Q4 and year-end earnings on Feb. 2 showing the recorded impairment charges on its BTC holdings, net of gains on sale, was nearly $1.3 billion over the full year 2022.

Despite the paper losses, on a Feb. 2 earnings call MicroStrategy’s chief financial officer, Andrew Kang, said:

“We may consider pursuing additional transactions that may take advantage of the volatility in Bitcoin prices, or other market dislocations that are consistent with our long-term Bitcoin strategy.”

On the call, MicroStrategy co-founder Michael Saylor said the company measures its stock performance against “a number of different benchmarks” saying “the most important benchmark is Bitcoin’s performance.”

Saylor added since MicroStrategy first announced it was buying Bitcoin in Aug. 2020 its “been able to outperform Bitcoin as an index” over that time.

*In its Q4 earnings presentation, the company shared its own analysis of its stock price performance compared to Bitcoin, indices and its competitors. Image: MicroStrategy*

He said the company’s stock is up 117% since Aug. 2020 compared to Bitcoin’s gain of 98%, and added:

“The only real safe haven for an institutional investor is Bitcoin. Bitcoin is the only universally acknowledged digital commodity, and so if you're an investor, Bitcoin is your safe haven in this regard.”

Kang stated MicroStrategy held a total of 132,500 BTC worth $1.84 billion as of Dec. 31, 2022. 14,890 BTC were held directly by the business with the remaining held in its subsidiary MacroStrategy LLC.

Late last year the company sold a portion of its Bitcoin holdings for the first time. Discussing the sale, Kang said the 704 BTC were sold to harvest a tax loss of around $34 million.

He added even with the sale, the company “increased our net holdings by 2500 Bitcoin during the quarter.”

MicroStrategy's overall revenue for the fourth quarter was $132.6 billion, reportedly beating Wall Street expectations. Its Q4 loss per share came in at $21.93.

At the time of writing, MicroStrategy’s stock price had fallen over 4% in after-hours trading according to Yahoo Finance data.

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MicroStrategy CEO won’t sell B BTC stash despite crypto winter

Bitcoin

MicroStrategy’s Michael Saylor has no intention of selling from his firm’s $5-billion Bitcoin chest despite a 40% drop in the value.

Despite a 40% drop in the value of Bitcoin (BTC), MicroStrategy’s Michael Saylor has no intention of selling his firm’s $5-billion stash.

Even if BTC suffers a lengthy bear market, Saylor told Bloomberg that he is a “Bitcoin bull” and does not intend to alter MicroStrategy’s multi-billion-dollar BTC acquisition plan. He took a firm stance against cashing out BTC:

“Never. No. We’re not sellers. We’re only acquiring and holding Bitcoin, right? That’s our strategy.”

This current crypto winter doesn't have Michael Saylor feeling all that cold. He tells @emilychangtv why in Studio 1.0 https://t.co/EsUlY5sscN pic.twitter.com/zWStdl5qsF
— Bloomberg TV (@BloombergTV) January 20, 2022

MicroStrategy became the first publicly listed corporation in the United States to acquire and hold Bitcoin as part of its balance sheet in August 2020. Since then, the business software manufacturer has amassed about 124,391 BTC worth about $5.2 billion at current market prices.

Due to the large portion of its balance sheet being taken up by cryptocurrency, the company’s shares have turned into a means to get exposure to the “digital gold.” After announcing its venture into BTC, MicroStrategy’s stock skyrocketed 900% at one time; however, recently, its collateral has gone into a tailspin after being exposed to excessive buying events financed in part with borrowed funds.

Since August 2020, MicroStrategy has continuously boosted its Bitcoin position, keeping its promise to purchase even more of the major digital currency. Late last year, MicroStrategy bought 1,914 BTC between Dec. 9 and Dec. 29 for $94.2 million, bringing its total to 124,391 BTC.

Despite the recent market sell-off, Saylor still considers BTC one of the best inflation hedges and alternatives for stock buyback events. He dismissed any concerns about the cryptocurrency’s decline from its all-time high of $69,000 in November to less than $40,000 this month, stating that because inflation is so high, the company’s assets are actually a source of “great comfort.”

Saylor, who previously branded cash a “melting ice cube,” anticipates more Wall Street names will buy BTC at current prices, describing it as “a great entry point for institutional investors.”

saylor