MicroStrategy Buys 132,500 BTC, Loses $1.8B in Unrealized Losses

• On December 22, 2022, software analytics company MicroStrategy sold 704 bitcoin in order to generate a net tax benefit.
• Two days later, MicroStrategy bought back 810 bitcoin at a higher price.
• In total, MicroStrategy now holds 132,500 BTC, acquired for about $4.03 billion at an average price of $30,397 per bitcoin, resulting in an unrealized loss of over $1.8 billion.

Software analytics company MicroStrategy recently made a move to generate a net tax benefit by selling 704 bitcoin, which it had acquired in the past few months. The sale took place on December 22, 2022, and was followed by the purchase of 810 BTC two days later. This resulted in an increase of MicroStrategy’s bitcoin holdings by 2,500 BTC, bringing their total to 132,500.

The bitcoin purchases began in November of 2020 when MicroStrategy first began adding the digital currency to its treasury. Between November 1 and December 21, 2022, the company bought 2,395 BTC for $42.8 million in cash. This purchase cost an average of $17,871 per bitcoin, inclusive of fees and expenses. This initial purchase was followed by the sale of 704 BTC at a loss on December 22 in order to generate the aforementioned net tax benefit. MicroStrategy then bought 810 BTC on December 24 at a higher price of $16,845 per BTC.

In total, MicroStrategy has now purchased 132,500 BTC, acquired for about $4.03 billion at an average price of $30,397 per bitcoin. Unfortunately, this has resulted in an unrealized loss of over $1.8 billion for the Virginia-based firm since the current market price of bitcoin is significantly lower than the price paid by MicroStrategy.

MicroStrategy CEO Michael Saylor commented on the company’s heavy investments in bitcoin, saying “Our investments in bitcoin reflect a disciplined strategy for preserving the value of our excess cash and for maintaining a long-term digital reserve asset.” He further assured investors that the company will continue to seek opportunities to expand its bitcoin holdings, in order to maximize returns and preserve its capital.