US-based mobile software and business intelligence firm MicroStrategy remains bullish on Bitcoin, despite a 48% price drop from its all-time high price last year.
MicroStrategy’s CFO, Phong Le, said the company will continue with its strategy of buying Bitcoin despite the current market downturn.
Mr. Le made the remarks in an interview with The Wall Street Journal this week, adding that their Bitcoin strategy is to “buy and hold” and any excess cash flow or money collected will be channeled into further purchases.
Asked by Bloomberg last week about a sale of the asset, Michael Saylor, the company’s chief executive and avid bitcoin enthusiast, replied, “Never. No. We are not sellers”, before adding: “We only acquire and hold Bitcoin, right? This is our strategy.”
Microstrategy remains in profit
The company made its first purchase of BTC in August 2020, when the asset was trading at around $11,500. She continued to buy more in 2020 and then throughout 2021 as the price soared.
As of December 29, 2021, MicroStrategy held 124,391 BTC, according to filings with the Securities and Exchange Commission (SEC). At current prices, this reserve is worth approximately $4.47 billion, making the company the largest holder of the digital asset.
According to BitcoinTreasuries, the base dollar cost of MicroStrategy’s BTC holdings is $3.75 billion, which means the company is still in a profit position of around $720 million, or roughly 16%. .
According to the Wall Street Journal, the company is also considering buying Bitcoin-backed bonds if the market becomes more liquid. Mr Le said this could happen over the next year or two, adding: “We are constantly looking for other ways to bring value to our shareholders in terms of is about bitcoin.”
The SEC sent a letter to MicroStrategy asking it to disclose its BTC holdings in its future filings rather than accounting for impairments. “Accounting is black and white, but disclosures tend to be gray,” said Le, who agrees in principle with the regulator’s demands.
Tesla’s BTC profits are shrinking
The second largest Bitcoin holding company in the world is Tesla, which owns 43,200 BTC according to BitcoinTreasuries. At current prices, its reserve is worth $1.55 billion, barely more than its base dollar cost of $1.50 billion.
Tesla CEO Elon Musk did not say whether the company would buy or sell more of the asset. Tesla sold around 10% of its BTC stash in the second quarter of 2021, boosting its earnings for that quarter by $272 million.
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