After the recent price rise, the IT service provider has $ 525 million in its Bitcoin war chest. Dump in sight?
On October 27, 2020, Kevin Rooke published data via Twitter, which shows that MicroStrategy is already deep in the black thanks to its Bitcoin investment. Or stand, because the profits from the IT company’s swollen Bitcoin portfolio have not yet been realized.
Does the Bitcoin Dump come from MicroStrategy?
The company announced the purchase of a total of 38,250 Bitcoin (BTC) in August and September 2020 . This inventory was valued at $ 425 million. Since then, the Bitcoin rate has soared to $ 13,745. MicroStrategy is currently in possession of Profit Revolution worth 535 million US dollars. This means that the equivalent of MicroStrategy’s Bitcoin reserve has risen by around 90 million US dollars within three months. That exceeds the combined net income of $ 78 million that Microstrategy has generated over the past three years.
MicroStrategy CEO Michael Saylor BTC justified the Bitcoin purchase with, among other things, a more promising return compared to the „hodln“ of a cash reserve.
The $ 425 million purchase of Bitcoin in the quarter offers shareholders higher potential returns than holding such amounts in cash and has increased MicroStrategy’s overall visibility in the marketplace.
Saylor had already written off Bitcoin
In August, MicroStrategy took over the cryptocurrency as its primary reserve asset, initially investing $ 250 million for 21,454 BTC. As a result, an additional $ 175 million was sought to acquire another 16,796 BTC. Though the company added digital assets for the first time in its quarterly report in Q3 2020, it reported losses of $ 14.2 million. The company then announced that it wanted to make the buying and selling of Bitcoins dependent on the Treasury Reserve Policy .
In 2013, Saylor declared Bitcoin practically dead and forecast a bleak future for the asset for the cryptocurrency:
Bitcoin’s days are numbered. It only seems like a matter of time before it suffers the same fate as online gambling.