MicroStrategy Makes Profit, Reports $24 Million Bitcoin Impairment Charge in Q2

Enterprise intelligence firm MicroStrategy—one of many largest institutional holders of Bitcoin within the U.S.—reported a $24.1 million impairment cost on its crypto holdings as we speak however nonetheless returned to profitability this quarter.

MicroStrategy mentioned in its Q2 2023 earnings report that it purchased much more Bitcoin in July. The biggest publicly traded firm with Bitcoin on its steadiness sheet now says it holds 152,800 cash—value about $4.4 billion. 

An impairment cost refers to a lack of worth in property—on this case, the digital property held by the corporate. The value of Bitcoin is at present down in comparison with the common value the software program firm initially paid per coin, ensuing within the loss. 

The web revenue of the corporate was $22.2 million for the second quarter of the yr, nevertheless, in comparison with a lack of practically $1.1 billion throughout the identical interval in 2022.

In the identical quarter final yr, Q2 2022, MicroStrategy had posted an impairment cost on its Bitcoin holdings of practically $1 billion.

Within the firm’s newest incomes assertion, MicroStrategy Chief Monetary Officer Andrew Kang mentioned the agency continued shopping for the asset “towards the promising backdrop of accelerating institutional curiosity, progress on accounting transparency, and ongoing regulatory readability for Bitcoin.”

Its founder and chairman Michael Saylor began shopping for the cryptocurrency in August 2020. He claims that the asset is an efficient hedge towards inflation and can get one of the best returns for shareholders.

To this point, he seems to be proper: regardless of the impairment cost, MicroStrategy inventory—MSTR on the Nasdaq—is up 197% for the reason that first Bitcoin purchase.

The value of the most important cryptocurrency by market cap has risen 156% since then, too, from $11,398 per coin to $29,238 as we speak.

Saylor has mentioned that the corporate’s technique “is to purchase and maintain Bitcoin, and the important thing for us is to be constant, clear and accountable within the pursuit of that technique.”