• MicroStrategy recorded a paper loss of over a billion dollars on its Bitcoin holdings in 2022.
• Despite the losses, the company has no plans to stop trading the digital asset and is looking for opportunities to take advantage of market dislocations.
• The company’s stock is up 117% since August 2020, compared to Bitcoin’s gain of 98%.
MicroStrategy Records Losses on Bitcoin Holdings
Software analytics company MicroStrategy recorded a paper loss of over a billion dollars on its Bitcoin BTC $23,438 Bitcoin -0.25% MARKET CAP$451.90bVOL. 24H$950.30m BTC $40.49k holdings in 2022 but says it has no plans to stop trading the digital asset. In its Q4 earnings presentation, the company shared its own analysis of its stock price performance compared to Bitcoin, indices and its competitors.
No Plans To Stop Trading
On a Feb. 2 earnings call MicroStrategy’s chief financial officer, Andrew Kang, said that they may consider pursuing additional transactions that may take advantage of the volatility in Bitcoin prices or other market dislocations that are consistent with their long-term Bitcoin strategy; showing that they have no plans to stop trading the digital asset despite the losses recorded in 2022..
Performance Compared To Bitcoin
MicroStrategy co-founder Michael Saylor said on the same call that since MicroStrategy first announced it was buying Bitcoin in August 2020, it has been able to outperform Bitcoin as an index over that time; with their stock being up 117% since August 2020 compared to Bitcoins gain of 98%.
Tax Loss Harvested From Sale
The company also booked a loss of $34 million on its first-ever sale of bitcoin last quarter but this was conducted intentionally with an aim to harvest tax loss from this sale .
In conclusion, although MicroStrategy suffered significant losses due to their investment in bitcoin they have no intentions to cease trading and believe it is still one of if not the only safe haven for institutional investors as evidenced by their continued success despite these losses.