MicroStrategy, the world’s largest publicly traded corporation by Bitcoin holdings, has released its third-quarter 2022 report. The company, which is headed by eternal bull Michael Saylor, made the revelation, stating that it has yet to sell a single Bitcoin.
According to public records, Saylor’s company purchased 301 Bitcoins for a total of $6 million in September, at an average acquisition price of around $19,860 per Bitcoin.
MicroStrategy’s total Bitcoin holdings had hit 130,000 as of the 30th of September, 2022. This amount represents 0.62% of all coins ever made on the globe. After deducting fees and other associated costs, this results in an average purchase price of $30,639 per coin, bringing the total cost of all transactions to $3.983 billion.
Nonetheless, the current book value is $1.993 billion, reflecting a cumulative impairment of $1.990 billion and an average book value per Bitcoin of roughly $15,331.
Furthermore, MicroStrategy declared a $727,000 impairment on its Bitcoin (BTC) holdings during the third quarter, in line with the very minor drop in the current price of Bitcoin. When compared to previous quarters, when the price of Bitcoin dropped dramatically, the losses were rather minor. MSTR reported a $917.8 million loss in the second quarter.
MicroStrategy’s Chief Financial Officer (CFO), Andrew Kang, stated in a recent news release that the company will continue to buy Bitcoin and hold onto it for the foreseeable future. Furthermore, the Chief Financial Officer stated that the corporation decided to implement fair value accounting as a result of a recent Financial Accounting Standards Board directive.
As a result, the firm will be able to immediately declare losses and gains, just as they would with other traditional financial assets. Kang believes that the recent events would push more public companies to consider Bitcoin as an asset class.
“We were encouraged by the FASB’s recent announcement supporting fair value accounting for Bitcoin, which resulted in a minimal bitcoin impairment charge for us. This was owing to the fact that bitcoin values remained stable throughout the third quarter.
We believe that, if finally adopted and implemented, fair value accounting will improve on the existing, adverse intangible accounting treatment of bitcoin holdings and will stimulate further institutional adoption of bitcoin as an asset class. If this is true, fair value accounting will encourage further institutional use of bitcoin as an asset class.”
MicroStrategy also stated in its press statement that its core business is immune to short-term volatility in Bitcoin prices. This was done in an attempt to reassure investors. Furthermore, the company’s short-term debt has no maturities, indicating that it has “sufficient liquidity to handle debt servicing commitments.”
Statistics Point to MicroStrategy’s Bitcoin Standard Being Supported
Michael Saylor, who resigned as CEO on August 8 but continues to serve as executive chairman, has not grown tired of highlighting that his bet on Bitcoin surpasses all other investments by a wide margin. On August 8, Saylor announced his resignation as CEO.
On October 28, he shared the chart below, which shows the performance of all of the most important assets and indices since MicroStrategy embraced the Bitcoin standard on August 10, 2020.
As this piece is being written, the price of Bitcoin is keeping reasonably constant as investors await Federal Reserve Chairman Jerome Powell‘s highly anticipated address at today’s FOMC meeting. The market has factored in a 75 basis point hike in rates and is largely focused on statements about future rate increases.
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