For the first time in nine months, MicroStrategy has posted a profit – helped along by the BTC rally seen so far in 2023. ‘Bitcoin Maxi’ Michael Saylor, founder of MicroStrategy, had made Bitcoin central to the company’s future outlook, and MicroStrategy has been accumulating the world’s largest cryptocurrency since August 2020. Since the start of the year, BTC has recorded an impressive 73% gain, and the company reported net profit of $461m for the first quarter of the year.
Despite the rally however, MicroStrategy has reported a $18.9m impairment loss on its BTC holdings for the quarter. Although that is significantly more positive for the company than the nearly $200m loss reported in the previous quarter. The loss also allowed MicroStrategy to reduce its tax liability for the quarter, with the loss being reported as an expense.
Is MicroStrategy back on track?
MicroStrategy’s Bitcoin-centric focus doesn’t seem to be showing any signs of easing up. Over the last three months, the company has increased its BTC holdings by 21% (or 7,500 BTC). Its total holdings now lie in the region of 140,000 BTC – currently worth close to $4bn. A Bitcoin-focussed approach has allowed the company to stay diversified as concerns shake the tech sector. As for the company’s share price, it has logged a 125% increase since the year began. YoY however, MSTR has seen a 12.5% decrease in price.
As a result of its crypto centric strategy, shares are still significantly down from their highs in November 2021. Additionally, there might still be some bumps in the road for Bitcoin. The possibility of increased rate hikes hinted at by the Fed could place further selling pressure on BTC, however renewed concerns for the banking sector could make Bitcoin seem increasingly appealing to investors as a hedge asset.
(About MicroStrategy)
MicroStrategy is a publicly traded business intelligence and analytics software company that was founded in 1989. The company is headquartered in Tysons Corner, Virginia, USA, and has offices and operations in various parts of the world. One of MicroStrategy’s notable investments in recent years has been its adoption of Bitcoin as a treasury reserve asset. The company has also developed a Bitcoin analytics product to help organizations analyze and understand the cryptocurrency’s market trends and behavior.
