MicroStrategy reported that it lost approximately $700 million as a result of its Bitcoin investment in the second quarter of 2021. Despite this, MicroStrategy has promised to buy more Bitcoin. MicroStrategy has made quite a name for itself with its Bitcoin investments. The company stated that since this loss was only on paper, it promised to double its Bitcoin investment and accumulate more.
MicroStrategy’s Bitcoin loss in 2021
Michael Saylor who is the CEO of MicroStrategy stated that MicroStrategy has become one of the biggest investors of Bitcoin with over 105,000 Bitcoin at an aggregate cost of $2.7 billion. Bitcoin is trading at around $39.000 on the stock market which means that MicroStrategy’s Bitcoin trove is valued at around $4 billion. Yet, according to the second-quarter report, these significant acquisitions that were completed in the second quarter of the year resulted in an impairment loss of $689.6 million for the company.
The company reported that its loss of operating expenses included losses on its digital assets was $424.8 million during the second quarter of 2021. Despite the loss, Michael Saylor emphasized that the loss would not change the strategy of the company about Bitcoin and made a statement about the issue.
“Our latest capital raise allowed us to expand our digital holdings, which now exceed 105,000 bitcoins. Going forward, we intend to continue to deploy additional capital into our digital asset strategy.”
It is important to state that the company has not sold any of its Bitcoin. This means that the losses were only on paper and have not been ‘realized’ yet. It was determined based on the price of Bitcoin at the end of the quarter. Currently, according to BitcoinTreasuries.org’s data, the company has the most Bitcoin holders among the corporate investors.
Despite the recent negative news such as China’s decision to ban crypto mining do not adversely affect Saylor’s opinion on Bitcoin. He emphasized that mining would be decentralized and in the long term, the Westernization of Bitcoin would have a positive effect on the Western market and capital.
He also specified that the company’s strategy is to focus on Bitcoin and that is why currently MicroStrategy has no plan to obtain another cryptocurrency. Saylor underlined that the risk is less comparing other cryptocurrencies and holding Bitcoin is the most diversified investment strategy and so, MicroStrategy will invest in Bitcoin more.