Bitcoin
BTC$23 122.84

-2.86%

Ethereum
ETH$1 700.88

-4.06%

Tether
USDT$1.000260

0%

USD Coin
USDC$0.999974

0.01%

Binance Coin
BNB$320.57

-0.95%

Binance USD
BUSD$1.000093

0.02%

MicroStrategy pledges to buy more BTC despite paper loss on its holdings of $424.8M in Q2


30 Jul 2021

#Bitcoin

As of June 30, 2021 MicoStrategy held an approximated 105,085 BTC with a carrying value of $2.051 billion, at a total impairment loss of $689.6 million since acquisition of the digital asset. Business intelligence and mobile software firm MicroStrategy has pledged to buy more Bitcoin despite reporting impairment losses of $424.8 million in Q2. This is only a paper loss however based on the price of Bitcoin at the end of the quarter and does not reflect a realized loss. Depending on how you add the figures up, MicroStrategy appears to have made nearly a billion dollars more from Bitcoin than it spent. 

Along with CEO Michael Saylor’s fervent belief in Bitcoin, that may be why it’s resolved to add more Bitcoin to its reserves going forward. The report stated: “We continue to be pleased by the results of the implementation of our digital asset strategy. 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."

The Q2 report was announced earlier today. As of June 30, 2021 MicoStrategy held an approximate 105,085 BTC with a carrying value of $2.051 billion, at an impairment loss of $689.6 million since acquisition. The average carrying amount per Bitcoin was an estimated $19,518. Earlier this week Elon Musk’s Tesla also published a Q2 report which showed a $23 million impairment loss on its Bitcoin holdings. 

As both firms categorize Bitcoin as an “intangible asset,” accounting rules mandate that they must report an impairment loss when the asset’s price drops below its cost basis. However they are not required to report price appreciation in the specified asset until the position is realized through a sale.

The digital asset figures were calculated using Generally Accepted Accounting Principles (GAAP) — a collection of commonly accepted accounting rules used for financial reporting. The firm also provided non-GAAP calculations, which in this report exclude the “impact of share-based compensation expense and impairment losses and gains on sale from intangible assets.”

Report: Here’s how much Musk and Saylor’s tweets influenced crypto prices in Q2

The non-GAAP figures paint a different picture for MicroStrategy’s digital asset holdings, with the BTC cost basis at $2.741 billion but its market value is $3.653 billion, which reflects an average cost per BTC at $26,080 and market price of $34,763 as of June 30.

Total revenues for the second quarter totaled $125.4 million, which was a 13.4% increase compared to Q2 of 2020. Microstrategy’s Gross profit equated to $102.3 million and represented a gross margin of 81.6%, which was a minor increase of 4.2% compared to the year prior. Overall MicroStrategy reported a second-quarter loss of $299.3 million, compared to a $3 million profit in the same quarter last year.

Saylor and MicroStrategy appear to be all-in on Bitcoin at this stage, and both have continued to accumulate the asset despite the crypto downturn that began in May, as the strategy is to hold the asset long term. The CEO did recently note however, that if the price of Bitcoin is lower than what it is today four years from now, he will reconsider his strategy.


Related

Bitcoin's bullish stability
Bitcoin's bullish stability
Bitcoin remains in ascending corridor
Bitcoin remains in ascending corridor
Bitcoin retreats from the upper boundary of an uptrend channel
Bitcoin retreats from the upper boundary of an uptrend channel
Musk has clipped the wings of Bitcoin
Musk has clipped the wings of Bitcoin
Crypto's full swing recovery
Crypto's full swing recovery
Blockchain projects are pulling the crypto market up
Blockchain projects are pulling the crypto market up
Bitcoin dipped into a flat
Bitcoin dipped into a flat
Bitcoin benefiting from gains in equities
Bitcoin benefiting from gains in equities
Cryptocurrencies rise after equities
Cryptocurrencies rise after equities

Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 80.8% 35 $23 122.84 -2.86% -0.45% $442 052 020 709 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 66% 68 $1 700.88 -4.06% 3.39% $207 345 459 308 ETH 7 days price change
3 Tether (USDT) USDT Tether predictions 96% 1 $1.000260 0% 0.01% $66 535 272 689 USDT 7 days price change
4 USD Coin (USDC) USDC USD Coin predictions 93.2% 1 $0.999974 0.01% -0.03% $54 016 698 575 USDC 7 days price change
5 Binance Coin (BNB) BNB Binance Coin predictions 69.2% 62 $320.57 -0.95% 10.84% $51 719 631 454 BNB 7 days price change
6 Binance USD (BUSD) BUSD Binance USD predictions 90.8% 1 $1.000093 0.02% 0% $17 752 948 934 BUSD 7 days price change
7 XRP (XRP) XRP XRP predictions 80.4% 36 $0.364958 -3.13% -1.47% $17 643 223 456 XRP 7 days price change
8 Cardano (ADA) ADA Cardano predictions 75.2% 50 $0.513095 -3.49% 1.17% $17 318 267 019 ADA 7 days price change
9 Solana (SOL) SOL Solana predictions 78% 44 $39.93 -5.35% 2.69% $13 912 448 632 SOL 7 days price change
10 Lido stETH (STETH) STETH Lido stETH predictions 94.8% 1 $2 941.39 -0.40% -3.32% $10 258 752 564 STETH 7 days price change
11 Polkadot (DOT) DOT Polkadot predictions 69.6% 62 $8.75 -3.49% 8.64% $9 674 125 229 DOT 7 days price change
12 HEX (HEX) HEX HEX predictions 64% 70 $0.054574 -4.20% 18.58% $9 463 792 913 HEX 7 days price change
13 Dogecoin (DOGE) DOGE Dogecoin predictions 84% 28 $0.068520 -5.27% 1.34% $9 090 549 257 DOGE 7 days price change
14 Avalanche (AVAX) AVAX Avalanche predictions 70% 55 $27.88 -0.14% 18.06% $7 943 269 330 AVAX 7 days price change
15 Dai (DAI) DAI Dai predictions 93.6% 1 $1.000408 0.10% 0.03% $7 524 853 234 DAI 7 days price change

Be the first to receive Cryptocurrency Price Predictions and Forecasts daily

Get cryptocurrency price predictions, forecasts with analysis and news right to your inbox.

© 2015-2022 Crypto-Rating.com

The usage of this website constitutes acceptance of the following legal information. Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website, including information about the cryptocurrencies and bitcoin is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Crypto Rating shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about cryptocurrencies. The entire responsibility for the contents rests with the authors. Reprint of the materials is available only with the permission of the editorial staff.