MicroStrategy Q3 Report Maintains Long-Term Bitcoin View

MicroStrategy, which is the world’s largest publicly traded firm by Bitcoin holdings, has released its report for the third quarter of 2022. The announcement was made by the company, which is controlled by perpetual bull Michael Saylor, claiming it still has not sold a single Bitcoin.

According to published accounts, Saylor’s business once again bought low in September, when it acquired 301 Bitcoins for a total of $6 million at an average acquisition price of roughly $19,860 per Bitcoin.

As of the 30th of September in 2022, the total amount of Bitcoins owned by MicroStrategy has reached 130,000. This quantity accounts for 0.62% of all coins ever minted in the world. This results in an average purchase price of $30,639 per coin, which brings the total cost of all transactions to $3.983 billion after deducting fees and other associated costs.

Nevertheless, the book value as of right now is only $1.993 billion, which reflects a cumulative impairment of $1.990 billion and an average book value per Bitcoin of around $15,331.

In addition, during the third quarter, MicroStrategy recorded a slight impairment of its Bitcoin (BTC) holdings amounting to $727,000; this was in keeping with the very small fall in the spot price of Bitcoin. When compared to prior quarters, during which the price of Bitcoin experienced huge drops, the losses were quite moderate. MSTR reported a loss of $917.8 million during the second quarter.

In a recent press statement, MicroStrategy’s Chief Financial Officer (CFO), Andrew Kang, highlighted that the company will continue to purchase Bitcoin and hold onto it for the foreseeable future. In addition, the Chief Financial Officer noted that the company made the decision to use fair value accounting as a result of a recent mandate issued by the Financial Accounting Standards Board.

Because of this, the corporation will be able to disclose losses and gains instantly, just like they would with other traditional financial assets. Kang stated that this will also encourage more public firms to tap into Bitcoin as an asset class as a result of what has just occurred.

Advertisement

“We were heartened by the FASB’s recent statement of its support for fair value accounting for Bitcoin, which resulted in us incurring a low bitcoin impairment charge. This was due to the fact that bitcoin values were constant during the third quarter.

We believe that if finally adopted and put into practice, fair value accounting will improve upon the current, unfavorable intangible accounting treatment that is applicable to bitcoin holdings and will encourage additional institutional adoption of bitcoin as an asset class. If this is the case, then fair value accounting will promote additional institutional adoption of bitcoin as an asset class.”

MicroStrategy also underlined in its news release that its main business is protected from short-term volatility in Bitcoin price. This was done with the intention of reassuring investors. In addition, there are no maturities coming up for short-term debt for the company, thus they have “adequate liquidity to handle debt service obligations.”

Statistics Point in the Direction of Support for MicroStrategy’s Bitcoin Standard
Michael Saylor, who resigned as CEO on August 8 but continues to serve the company in the role of executive chairman, has not grown tired in recent times of emphasizing that his bet on Bitcoin outperforms all other investments by a significant margin. Saylor stepped down from his position as CEO on August 8.

On October 28, he distributed the chart that can be found below, which details the performance of all of the most important assets and indices since MicroStrategy adopted the Bitcoin standard on August 10, 2020.

As this article is being written, the price of Bitcoin is remaining relatively stable as investors wait for the highly anticipated speech that Federal Reserve Chairman Jerome Powell will deliver at today’s FOMC meeting. According to a report by NewsBTC, the market has factored in an increase in rates of 75 basis points and is primarily concentrating on the comments regarding future rate increases.

For More Blockchain News, Click Here.

Advertisement