MicroStrategy Posts Loss Because of Bitcoin But Buys More Anyway
MicroStrategy has posted a Q1 loss due to an impairment charge against the value of its Bitcoin holdings.
The business intelligence firm reported a net loss of $53.1 million as a result of its $191.6 million digital asset impairment loss, which increased 10x from the previous year. Revenue fell 5.5% compared to the same quarter last year, reaching $115.2 million.
Accounting rules prevent MicroStrategy from recognising any gains in its Bitcoin holdings, which jumped 67% in the most recent quarter. Consequently, Microstrategy's carrying value of Bitcoin was marked at $5.07 million at $23,680 per Bitcoin compared to $15.2 billion if the fair value approach was adopted.
MicroStrategy wrote a letter to the Financial Accounting Standards Board (FASB) in May 2023 to support fair value reporting for digital assets. FASB amended its rules to accommodate the new standard for fiscal years after 15 December 2025.
On X, MicroStrategy chairman Michael Saylor revealed the firm bought another 122 Bitcoin for $7.8 million this month.
In April, @MicroStrategy acquired an additional 122 BTC for $7.8 million and now holds 214,400 BTC. Please join us at 5pm ET as we discuss our Q1 2024 financial results and answer questions about the outlook for #BusinessIntelligence and #Bitcoin. $MSTR https://t.co/h40yyrgEb0
— Michael Saylor⚡️ (@saylor) April 29, 2024
The firm now holds 214,400 Bitcoin, worth $13.5 billion, with an average purchase price of $35,180.
$1.5 billion was raised from two convertible note debt offerings to acquire 25,250 Bitcoin.
According to Chainalysis's Crypto Spring report, MicroStrategy is the leading public company in terms of Bitcoin holdings. Total disclosed Bitcoin held by public companies stands at 303,049 Bitcoin - MicroStrategy's holdings account for 70% of this.
Chainalysis explained that increased sizeable Bitcoin holdings by public companies inspire confidence in the market.
"Such disclosures not only reflect the widening acceptance and legitimization of cryptocurrency in the corporate world but also signal a positive outlook for the market at large," the research firm stated.
"When prominent companies publicly commit to holding cryptocurrencies, it can stimulate investor confidence and interest, potentially leading to increased growth in the space."