MicroStrategy Won’t Stop Trading Bitcoin (BTC) Despite a Paper Loss of $1.3 Billion

MicroStrategy incurred a $1.3 billion paper loss on its Bitcoin holding in 2022 but continues to bet on the asset.

Microstrategy's Phong Lee stands with his arms crossed in front of piles of bitcoins. The piles are chained and padlocked

MicroStrategy, the biggest corporate holder of Bitcoin (BTC), reported an impairment charge of $1.3 billion on its BTC holdings in 2022 as prices of crypto plummeted, but the company has said it won’t stop trading Bitcoin.

MicroStrategy’s Paper Loss Hit $1.3 Billion

In its earnings report for the fourth quarter of 2022, software analytics company MicroStrategy reported impairment charges on its BTC holding hit $197.6 million, up from a $727,000 charge in Q3.

Sponsored

For 2022, the company’s impairment charge hit $1.3 billion. Paper loss or impairment charge shows the decline in the value of an investment but doesn’t involve a real loss of cash.

MicroStrategy currently holds 132,500 bitcoins at a total acquisition cost of roughly $4 billion. The paper loss represents the decline in the price of BTC versus the price at which it was acquired.

MicroStrategy Won’t Stop Trading Bitcoin

Despite the huge impairment charges, MicroStrategy’s Chief Financial Officer Andrew Kang said the company’s “corporate strategy and conviction in acquiring, holding, and growing our bitcoin position.”

Further affirming this stance over an earnings call, chairman Michael Saylor said despite the loss, the performance of MicroStrategy stock since the company began buying Bitcoin is better than major indices and the likes of Google, Apple, Microsoft, and Amazon.

On the Flipside

  • In 2022, MicroStrategy sold 704 BTC – its first-ever sale – to harvest a tax loss of around $34 million. 

Why You Should Care

The continuous purchase of BTC by MicroStrategy reflects the company’s belief that Bitcoin is an effective long-term hedge against inflation.

To understand Saylor’s view on Bitcoin, read:
Michael Saylor and the Philosophy of Bitcoin Maximalism

More on MicroStrategy’s Bitcoin push is covered in:
MicroStrategy to Bring Lightning Solutions in 2023 to Contribute to the Ecosystem – Michael Saylor

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Milko Trajcevski

Milko Trajcevski is a DailyCoin news reporter, mainly focused on Ethereum (ETH), Cardano (ADA), and their founders (Vitalik Buterin and Charles Hoskinson). Milko is an avid follower of crypto and blockchain technology and has written thousands of articles on the subjects. He finds joy in transforming complex issues into written content that anyone can understand. Milko has used and analyzed numerous exchanges, such as Coinbase, FTX, and Binance. He also closely follows all of the latest news around the largest decentralized exchanges (DEXs). Location: Skopje, Macedonia