MicroStrategy and Bitcoin Love Affair: Is the Company’s BTC Investment Currently Profitable?

- Advertisement -

• MicroStrategy continues to accumulate BTC regardless of market conditions and has become the largest publicly traded company owner of the original cryptocurrency.
• Saylor’s company has maintained its aggressive approach and, as announced in a regulatory filing on September 25, added approximately 5,445 BTC to its holdings for about $150 million.
• As of the time of writing, on September 26, Bitcoin was trading at $26,299, a 0.6% increase in the last 24 hours. However, over the past week, the crypto asset lost about 2.7% of its value.

MicroStrategy has been buying Bitcoin for three years, establishing itself as a leader in the corporate space through these purchases. Are these investors currently profitable?

MicroStrategy’s Bitcoin Investments

Three years ago, Michael Saylor, one of MicroStrategy’s visionary founders, announced the “Bitcoin Initiative” – a corporate strategy aimed at acquiring and holding Bitcoin (BTC) in a steady manner.

Since then, MicroStrategy has continued to accumulate BTC regardless of market conditions and has become the largest publicly traded company owner of the original cryptocurrency.

Last month, Saylor’s company continued its aggressive approach, announcing in a regulatory filing on September 25 that it had added approximately 5,445 BTC to its holdings for about $150 million. The company reported an average purchase price of approximately $27,053 per BTC for this investment.

This move increased MicroStrategy’s total BTC holdings to approximately 158,245 coins, with a combined purchase price of $4.68 billion and an average purchase price per Bitcoin of $29,582.

With its latest purchase, MicroStrategy significantly increased its exposure to Bitcoin and now holds more than 0.75% of the total supply of the 21 million coins. However, the company’s total BTC investment is currently not profitable.

Specifically, during a period when BTC traded around $26,200, well below the average purchase price per coin, the investment has incurred losses exceeding $500 million.

What’s the current state of the Bitcoin price?

As of the time of writing, on September 26, Bitcoin was trading at $26,299, a 0.6% increase in the last 24 hours. However, over the past week, the crypto asset lost about 2.7% of its value. Nevertheless, BTC is still nearly 60% higher year-to-date and maintains its top position in terms of market capitalization.

Bitcoin, along with other digital assets, has struggled to make a significant price breakout in recent weeks due to a lack of positive catalysts. Uncertainty surrounding the Federal Reserve’s future monetary policy decisions and the SEC’s rulings on various spot Bitcoin exchange-traded fund (ETF) applications have led investors to remain cautious.

Last week, the Fed kept interest rates unchanged for this month, but Chairman Jerome Powell mentioned that the bank would consider additional rate hikes in 2023 if necessary.