Publish Your Article

Markets

Bitcoin (BTC): MicroStrategy, $330 million gone up in smoke (theoretically)

The fall in the price of king of crypto brought with it the loss of bitcoins from MicroStrategy. Having bought roughly 129,218 BTC, Michael Saylor’s company would have lost, theoretically, $330 million.

On paper, MicroStrategie shows a very significant loss in bitcoins (BTC)

At the stage where we are, with the plummeting price of bitcoin, MicroStrategy Reportedly Lost $330 Million BTC Equivalent. Since Cointribune has never stopped reporting the purchases of this business intelligence (BI) software company, there is reason to give you all of its bitcoin holdings.

At this time, MicroStrategy holds 129,218 BTC purchased at an average price of $30,700 per coin. However, the current price of bitcoin is $28,200. A quick calculation would show a bitcoin loss of $330 million for this company. But it is very important to mention that this loss would not come from a sale of cryptocurrencies.

At the same time, the fall in the crypto markets has also affected MicroStrategy’s share price. In recent days, it has fallen sharply to the point of approaching 168 dollars last Wednesday. Basically, the decline is estimated at 45%.

MicroStrategy, a pro-bitcoin

Among the best-known crypto enthusiasts is MicroStrategy and its CEO Michael Saylor. Not only did the latter encourage his team to acquire bitcoins, but he never hesitated to oppose any anti-cryptocurrency who did not skimp on criticism.

MicroStrategy made its first purchase of BTC, and subsequently integrated it into its balance sheet, in August 2020. On occasion, Saylor has stated that bitcoin is a superior asset for a public treasury since it is deflationary by design.

Here is what he said at the time:

Gold is defective at 21and century. It boils down to a very simple principle. It will depreciate by 2-4% per year, certainly over the next hundred years.

As for the dollar, Mr. CEO did not hesitate to denigrate the expansion of monetary policy and inflation, the effects of which on purchasing power seem irrevocable.

Hence his optimism for bitcoin. His recent tweet only confirms this:

One thing matters more than the rest. #Bitcoin.

MicroStrategy has often stated that it will not stop buying bitcoin regardless of how its price changes. In other words, she has been betting on this cryptocurrency for quite a while.

During an interview with The Block at the end of 2021, Saylor presented the company’s 2 strategies:

  • develop its enterprise software publishing activities;
  • invest in bitcoin (BTC).

Here is the exact sentence of Michael Saylor concerning this second point:

[Nous allons] invest our excess cash flow in bitcoin, and we hold it for the long term.

Is it still valid after experiencing this heavy loss in bitcoin? Time will tell us.

MicroStrategy, debts and loss of bitcoin

The American firm’s bitcoin bets required funding of over $2 billion. How do you think MicroStrategy was able to afford this colossal sum? Via convertible and guaranteed loans.

Recently, the software maker took out a $205 million bitcoin-backed term loan from Silvergate Bank, through its subsidiary MacroStrategy, to buy BTC again.

Imperturbable as ever, Michael Saylor does not seem worried about the current situation experienced by his company. Neither the price drop nor the loss in BTC. His tweet posted earlier this week let us know that MicroStrategy holds 115,109 pawnable bitcoins. So if the price of the king of cryptocurrencies falls below $3,562, the company “ could deposit other guarantees “.

Note that MicroStrategy is not the only company to have experienced a loss in bitcoin on paper. Indeed, there is El Salvador, a country holding BTC, and Tesla, the company of Elon Musk. Except that the turbulence that the cryptocurrency market is currently experiencing would only cause damage “on paper”. Saylor has strong reason not to worry at this time.

Source: The Block Crypto

Receive a digest of news in the world of cryptocurrencies by subscribing to our new daily and weekly newsletter service so you don’t miss any of the essential 247 News Bulletin!

Source: Cointribune

Related posts
Markets

Ripple CEO Meets Georgian Prime Minister

Markets

Bitcoin (BTC): Tomorrow all paid by the second in satoshis?

Markets

Bitcoin (BTC) and CBDC on the agenda of the EU and the World Economic Forum

Markets

STEPN: Prohibited to Chinese from July?

Leave a Reply

Your email address will not be published.