Tech
MicroStrategy suffers a net loss of $53.1 million, but the Bitcoin buying spree continues
The largest holder of Bitcoin, MicroStrategy, shared information about its total loss of $53.1 million in the first quarter of 2024. But despite this negative development, the company maintained its usual purchase of Bitcoin, accumulating even more in April.
Notably, the recent loss incurred is lower than the previous value in the same period last year. At the time, the company reported that it had lost a total of $191.6 million.
Moreover, according to the company’s first quarter results archivingrevenue declined over the same period, falling 5.5% from the first quarter of 2023. This decline brings its total revenue to $115.2 million.
MicroStrategy Operations in Q1 2024
MicroStrategy has yet to implement the new accounting standard for digital assets. This means they have yet to take advantage of Bitcoin’s 65% price increase using this new method.
So, according to traditional accounting, their Bitcoin holdings are valued at $5.07 billion, based on $23,680 per Bitcoin. This figure would have amounted to $15.2 billion if they had used the fair value approach.
Despite this, MicroStrategy is going strong with its Bitcoin investments. Only in April, they bought another 122 Bitcoins for $7.8 million. This purchase brought their total holdings to 214,400 Bitcoin, worth $13.5 billion.
MicroStrategy also raised $1.5 billion from two convertible debt offerings in the first quarter, allowing him to purchase an additional 25,250 Bitcoin.
According to CEO, Phong Le, the first quarter marked the 14th consecutive quarter that the company increased its Bitcoin holdings.
However, despite the company’s active involvement in Bitcoin, MicroStrategy shares took a hit, losing 3.3% in after-hours trading after the announcement of its first-quarter financial results. This drop is likely related to the decline in Bitcoin’s price after its initial rise.
The stock hit a high of $1,704 in late March, following Bitcoin’s rally at the time. However, second per Google Finance, it appears to be declining and is currently trading at $1,292.
Bitcoin (BTC) market conditions.
While Bitcoin’s recent 5.6% drop over the weekend grabbed headlines, there’s more to the story than meets the eye. In addition to Bitcoin, other major digital assets such as Ethereum, Solana, and XRP also posted losses, contributing to a 3% decline in the overall market capitalization to $2.42 trillion.
Insights by Crypto Banter, a respected voice in the crypto community, shed light on the causes behind this decline. Instead of attributing it solely to cryptocurrency market dynamics, he highlighted external factors, particularly the devaluation of the Japanese yen against the US dollar.
Additionally, anticipation for the upcoming Federal Reserve meeting fueled the fire.
Market analysts are closely monitoring the Fed’s stance on interest rates and monetary policy adjustments, as any decision it makes could reverberate in financial markets around the world.
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