Michael Saylor's $4 billion bitcoin Gamble Is Slowly But Steadily Inching Towards Profitability
MicroStrategy's popular bitcoin bet looks profitable again after a negative performance over the past three quarters. The cloud technology company led by Bitcoin maximalist Michael Saylor bought 138,955 BTC and invested $4 billion in the world's first decentralized cryptocurrency over the past three years.
MicroStrategy Gains As Bitcoin Rallies
Bitcoin has increased in value by nearly 73% in the last three months. This is the largest quarterly increase in the last two years. However, due to industry scandals and bankruptcies, prices fell by 64% in the previous year. On Wednesday, Bitcoin hit a three-month high of $29,171, slightly below the company's average price of $29,817.
According to a Bloomberg report, MicroStrategy avoided impairments and reduced its assets for the first time in 10 quarters. The company had written off about half of its Bitcoin investments by the end of the year. Thaler has increased its investment in Bitcoin despite volatile changes in the stock price and the value of the digital currency. To raise money to buy more bitcoins, the company took out a loan from crypto-friendly bank Silvergate, which has since gone bankrupt.
Michael Saylor’s Big Bet On Bitcoin
In August 2020, Siler publicly admitted to buying Bitcoin for the first time. Citing the risk of rising inflation, he argued that digital currencies are a better alternative to traditional assets such as short-term government bonds from software companies. As a result of Siler's decision to include Bitcoin among the company's strategic goals, the small IT company became an important representative of cryptocurrency investments. The company's share price has more than doubled since August 2020, outperforming the benchmark SandP 500 index, which has risen about 16% over the same period.
On Monday, MicroStrategy announced it had added $150 million to its cryptocurrency purchases and sold shares to cover the remaining $205 million in loans. The company's most recent purchases since April 2022, totaling approximately 6,455 tokens, were made between February 16th and March 23rd.