MicroStrategy, a US-based software developer who supports Bitcoin (BTC), has seen its BTC investments drop by USD 479m this year. However, it still managed to increase by USD 676m over the course of the year.
According to June 21 press release the company has approximately BTC105,085, purchased at a total purchase price of USD 2.741bn, and an average purchase cost of USD 26,080 per BTC since their August 2020 purchase, with all fees and expenses.
This represents 0.5% of total BTC supply.
BTC trades at USD 32,514. It is down by more than 3% per day and 20.5% per week. Accordingly, the current price of the coin is higher than the average price per BTC purchased by the company.
MicroStrategy’s BTC holdings currently amount to USD 3.417bn. This is almost 25% more than the aggregate purchase price.
The value of investments in 2021 has declined due to the recent decline in BTC prices.
MicroStrategy has reported buying since the start of the year.
- BTC 314 at USD 10m with an average price USD 31,808 for January
- BTC 19,452 at USD 1.026bn, an average price around USD 52,765 per month in February.
- BTC 328 at USD 15m with an average price USD 45,710 for March
- BTC 262 at USD 10.5m with an average price USD 57.146, also in March.
- BTC 253 at a price of USD 15m, with an average USD 59.339 in April
- BTC 271 at USD 15m with an average price USD 55,387 in June;
- BTC 13,005 at USD 489m for an average price USD 37,617 as reported Monday.
This year, the company bought Bitcoin every month, regardless of its price. The lowest price per BTC was USD 31,808, while the highest price was USD 59,339. They exchanged USD 1.58bn worth of BTC 33.885 for this year.
The company saw another drop in its price with the June purchase. The problem is, or an opportunity, that the price kept falling.
BTC’s current value is USD 1.1bn, or 30% more than its paid price. Their investment in BTC this year is approximately USD 479m lower than the price paid. This amount is almost equal to what they spent on BTC during their most recent deal.
MicroStrategy might have to mark down the BTC value it purchased due to the drop in value, Bloomberg reported. According to accounting rules, the firm will need to write down its holdings if the market value drops below the price it bought the coin.
The report shows that the net income of the USD 5.7bn-company from 2018 to 2020 was only USD 67.6m. It will also take a USD 284.5m charge in its next earnings report. This will “bring the company’s total Bitcoin-related impairments up to [USD] 500 millions.”