MicroStrategy, a publicly traded business intelligence and mobile software company based in the United States, has demonstrated its confidence in Bitcoin (BTC) despite the current market downturn. The company, led by CEO Michael Saylor, has consistently been acquiring BTC, with the most recent purchases occurring between November and December 21, 2022.
MicroStrategy acquisition
According to a filing with the Securities and Exchange Commission (SEC), Microstrategy acquired nearly 2,395 BTCs during this time period at a cost of $42.8 million, with each Bitcoin averaging at $17,871. This purchase was made using cash, rather than borrowing funds or using existing assets as collateral. The average price paid for each Bitcoin during this purchase was significantly higher than the current market price of BTC, which has been experiencing a downturn in recent months. However, MicroStrategy’s CEO has consistently expressed his belief in the long-term potential of BTC and has stated that the company is willing to hold onto its BTC holdings for the foreseeable future.
In addition to its latest BTC purchases, MicroStrategy also made its first sale of the cryptocurrency. On December 22, 2022, the company sold approximately 704 BTCs for $11.8 million, with each Bitcoin selling for an average price of $16,776. This sale was motivated by the potential tax benefit the firm would receive, as the filing stated that MicroStrategy plans to “carry back the capital losses resulting from this transaction against previous capital gains, to the extent such carry backs are available under the federal income tax laws currently in effect, which may generate a tax benefit.”
Despite this sale, MicroStrategy’s appetite for BTC has not diminished. On December 24, 2022, the company made another purchase of 810 Bitcoins, this time for $13.6 million in cash and at an average price of $16,845 per BTC. As a result of these purchases and sales, MicroStrategy’s BTC holdings now stand at approximately 132,500, acquired at a total cost of $4.03 billion and an average price of $30,397 per BTC.
Final Thoughts
Overall, MicroStrategy has increased its BTC holdings by 2,500 between October and December 27, 2022, from a previous total of approximately 130,000. The company’s continued acquisition of BTC and its willingness to sell some of its holdings for the potential benefit of a tax carry back demonstrate its confidence in the long-term potential of the cryptocurrency. The company’s CEO, Michael Saylor, has consistently emphasized his belief in the value of BTC as a long-term asset and has stated that the company is committed to holding onto its BTC holdings for the foreseeable future.
