MicroStrategy Acquires 660 More Bitcoins

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Key Takeaways:

  • MicroStrategy (Nasdaq: MSTR), a business intelligence software company revealed it spent nearly $25 million buying 660 bitcoins between December 30, 2021 and January 31, 2022.
  • According to a release, the corporation paid an average price of $37,865 per bitcoin.
  • MicroStrategy, based in Virginia, currently owns 125,051 bitcoins, worth nearly $4.8 billion at the current bitcoin price of $38,700.
  • MicroStrategy is supposed to report earnings and transactions related to bitcoin under the Generally Accepted Accounting Rules (GAAP) standard as a publicly traded company in the United States.
  • MicroStrategy introduced a “Non-GAAP Monetary Measurements” section to Kind 10-Q for the quarter ended September 20, 2021 to address the inadequacies of GAAP earnings due to bitcoin impairment losses.

Here comes a  new monthly update for MicroStrategy’s (NASDAQ: MSTR) bitcoin holdings.

Despite the cryptocurrency’s steep drop in value over the last month, the firm appears to be continuing to buy the cryptocurrency, albeit at a slower pace.

MicroStrategy has profited roughly $1 billion on their $3.78 billion Bitcoin buy. At the current Bitcoin price of $38,000, the firm’s 125,051 Bitcoins are worth over $4.6 billion.

Between the company’s final statement on December 30, 2021, and January 31, 2022, 660 bitcoins were supposedly purchased for a total of $25.0 million. While the company continues to buy cryptocurrency, the total amount paid is much less than the $94.2 million spent between December 9 and December 29 or the $82.4 million spent before that.

MicroStrategy has bought practically every Bitcoin dip, with an average buy price of $30,200/BTC. Bitcoin and the cryptocurrency industry are currently in a challenging market condition, with Bitcoin recently falling to $32,500. Meanwhile, the price of BTC has rebounded from the previous massacre and is now trading around $38,500.

The current batch of crypto was purchased on average for $37,865 per bitcoin, bringing the firm’s total acquisition price to $30,200 per bitcoin. Following the transaction, the business now owns 125,051 bitcoins for a total cost of $3.78 billion, including fees and expenditures.

On the Nasdaq, MicroStrategy was last seen trading at $368.01.

CEO Michael Saylor has stated that the company has no plans to sell its bitcoin assets and is committed to cryptocurrency for the long haul.

The SEC objects to MicroStrategy accurately assessing their multibillion-dollar Bitcoin stash

MicroStrategy is required to report earnings and transactions connected to bitcoin under the Generally Accepted Accounting Principles (GAAP) standard as a publicly traded corporation in the United States. The proper accounting for these transactions in GAAP financial statements, on the other hand, is still a work in progress. Current GAAP standards, which define digital assets as intangible assets with indefinite lifetimes (equivalent to a company’s goodwill and trademarks), fail to represent bitcoin holdings’ true financial behaviour.

According to the AICPA’s white paper, crypto-assets can’t be classified as “money or money equivalents” on GAAP financial statements because they aren’t backed by a sovereign government or considered legal tender.

This resolution requires businesses to disclose a loss when the cost of the digital property falls below the fee; yet, it forbids businesses from marking up digital property to its actual value if prices improve subsequently. This mismatch can have a detrimental impact onorganisation’son’s web earnings, which may be misinterpreted as a lower price per share.

MicroStrategy includes” a “Non-GAAP Monetary measurements” section to their Form 10-Q (Quarterly monetary report public businesses file with the SEC) for the quarter ending September 20, 2021, to address the inadequacies of GAAP earnings due to bitcoin impairment losses. Despite this, the SEC has raised concerns about the new solution.

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Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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