The business analytics company, MicroStrategy, made its biggest investment in Bitcoin since 2021 in the second quarter of 2023, despite a slight decrease in revenue. An investment of $347 million was made, purchasing 12,333 BTC. MicroStrategy continues its strategy of investing in Bitcoin, considering it a “reliable store of value”.
MicroStrategy, a well-known company specializing in business analytics, announced on August 1st a substantial acquisition of Bitcoin in the second quarter of 2023. Andrew Kang, Chief Financial Officer at MicroStrategy, highlighted that the addition of 12,333 bitcoins represents the largest growth in a single quarter since Q2 2021. He also added that the company effectively raised capital and used funds from operations to continue increasing the number of bitcoins on its balance sheet.
In a separate statement, the company reported that the purchased 12,333 BTC cost it $347 million, giving an average price of $28,136 per Bitcoin. It should be noted, however, that these figures do not take into account the total amount of Bitcoin that the company has acquired. According to MicroStrategy’s data, as of July 31, 2023, the company acquired a total of 152,800 BTC for $4.53 billion, giving an average price of $29,672 per Bitcoin.
Despite these high estimates, the company stated that the book value (the original cost of assets, less any depreciation or amortization costs) of its Bitcoin was only $2.3 billion. This reflects accumulated impairment losses of $2.196 billion since the first purchase and an average book value of Bitcoin at $15,251.
It was also observed that shares of MicroStrategy (MSTR) and Bitcoin outperformed many other indices and assets. Since adopting the Bitcoin strategy in August 2020, MSTR shares have risen by 254%, while the value of Bitcoin has increased by 145% [https://www.coindesk.com/markets/].
MicroStrategy also reported total revenues of $120.4 million in Q2 2023, which represents a 1% year-on-year decline in revenue.
Kang placed MicroStrategy’s purchases in the broader context of industry development, such as growing interest from institutional investors and increased regulatory clarity around Bitcoin. He also mentioned that MicroStrategy sees progress in Bitcoin accounting practices. In May, the company sent a letter to the Financial Accounting Standards Board (FASB), expressing support for fair valuation of crypto assets. It argued that this would allow for a “more meaningful” view of owned Bitcoins [https://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176168068676].
In its company profile, MicroStrategy defined Bitcoin as a “reliable store of value” and described the acquisition of Bitcoin as one of the two main strategies alongside its enterprise software business.
On August 2, 2023, MicroStrategy announced the sale of up to $750 million of its Class A shares, potentially to finance additional Bitcoin purchases.
