Bitcoin’s largest corporate investor wants to buy more despite taking a loss — and it has $1.5 billion to spend

Bitcoin’s largest corporate investor wants to buy more despite taking a loss — and it has $1.5 billion to spend
MicroStrategy CEO Michael
  • MicroStrategy intends to buy more Bitcoin despite an impairment loss of $424.8 million between April to June this year.
  • The company is currently Bitcoin’s largest corporate investor with 105,085 Bitcoin in its kitty.
  • The nearly half a billion impairment loss reflects a decline in Bitcoin's worth, but it can effectively be recouped when the price starts going up.
Business intelligence company MicroStrategy, led by crypto billionaire Michael Saylor, is Bitcoin’s largest corporate investor. Overall, it has the fifth-largest holding of Bitcoin in the world. Having raised $1.5 billion with plans to get its hands on even more capital, the company has plans to buy even more Bitcoin in the coming months.

Our latest capital raise allowed us to expand our digital holdings, which now exceed 105,000 bitcoins. Going forward, we intend to continue to deploy additional capital into our digital asset strategy.

Statement by MicroStrategy CEO Michael Saylor on second quarter earnings

The decision to buy Bitcoin comes despite MicroStrategy being hit with an impairment loss of $424.8 million between the months of April to June. The cryptocurrency was valued at more than $60,000 in mid-April but crashed radically and hovered around $35,000 for a good while.

Due to the dip, the overall value of the Bitcoin in MicroStrategy’s kitty was at $2.051 billion at the end of June, which reflects cumulative impairment losses of $689.6 million since acquisition. This puts the average holding value of its 105,085 Bitcoin treasure trove at $19,518 apiee.

However, the nearly half a million loss hasn't been ‘realised’ yet. It has been calculated on the basis of Bitcoin's price at the end of the quarter. The impairment loss only reflects the decline in Bitcoin's worth, but it can effectively be recouped when the price starts going up.

Bitcoin’s five largest corporate investors:


Corporate Bitcoin holderBitcoin holdings
Voyager Digital15,901
Galaxy Digital12,957.5
Source: Kevin Rooke, MicroStrategy second-quarter earnings

MicroStrategy is raking in the funds to buy more cryptocurrencies

MicroStrategy has in the past year gone from near obscurity to a well-known power on Wall Street and in the crypto community, thanks to its aggressive bets on Bitcoin. Last month, it raised a greater-than-expected $500 million through the sale of bonds.

The raised capital will be used to acquire more cryptocurrencies. It is the first time ever junk bonds will be used to fund a cryptocurrency acquisition.

The software developer has also decided to sell more stock worth $1 billion to even more funds. The stock offerings will bring its total amount raised since last year to $2.1 billion, while the firm's 2020 investments alone are worth roughly $3.6 billion as of writing.

Michael Saylor is second only to Elon Musk with his influence over Bitcoin’s price

CEO Michael Saylor has long been a supporter of Bitcoin. According to a report by TIE and eToro USA, every time Saylor tweeted about the cryptocurrency, its value rose by an average of 4.4% in the next 24 hours.

As recently as March, Saylor warned about the drawbacks of cash and traditional assets during a Blockworks webinar. “Bitcoin and digital assets became the solution to monetary inflation,” he said, “There’s an awareness that isn’t going away.” But, this was before the ‘halving event’ that cut brought Bitcoin’s price from above $60,000 to $30,000.

MicroStrategy isn’t alone, even if it is the biggest

MicroStrategy isn’t the only company to take a hit from Bitcoin’s price drop in the second quarter. Elon Musk's Tesla reported $23 million in impairment related to Bitcoin in its second quarter's operating income.

However, the $23 million loss might not hurt Tesla, given its investment worth over billion dollars in Bitcoin. Musk and Saylor are often called the driving forces behind Bitcoin's bullish momentum but have equally been criticised for further increasing its volatility.

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