Bold investments or recklessness? MicroStrategy continues to bet on Bitcoin

MicroStrategy continues to invest heavily in Bitcoin, despite a net loss of 53 million dollars in the first quarter of 2024. This strategy raises questions about the impact on the Bitcoin market and long-term profitability.

In April, @MicroStrategy acquired an additional 122 BTC for $7.8 million and now holds 214,400 BTC. Please join us at 5pm ET as we discuss our Q1 2024 financial results and answer questions about the outlook for #BusinessIntelligence and #Bitcoin. $MSTR https://t.co/h40yyrgEb0

— Michael Saylor⚡️ (@saylor) April 29, 2024

MicroStrategy maintains its commitment to Bitcoin

MicroStrategy’s increased interest in Bitcoin investments is well known. It acquired 122 additional Bitcoins in April 2024 for an amount of 7.8 million dollars. This latest acquisition brings MicroStrategy’s total Bitcoin holdings to 214,400 BTC.

Indeed, these massive Bitcoin acquisitions seem to be bold. However, they come at a time when the company recorded a net loss of 53.1 million dollars. This represents 3.01 dollars per share.

MicroStrategy’s revenues also fell by 5.5% compared to the first quarter of 2023, reaching 115.2 million dollars. The loss due to depreciation of digital assets amounts to 191.6 million dollars, a consequence of the volatility in the cryptocurrency market.

Massive Bitcoin purchases despite devaluation

Throughout the year of 2024, MicroStrategy has acquired a total of 25,250 Bitcoins for an amount of 1.65 billion dollars. This represents an average cost of 65,232 dollars per coin. Despite this aggressive accumulation, the value of the company’s digital assets has dropped to 5.07 million dollars.

If MicroStrategy had adopted the new fair value accounting standard for digital assets, its Bitcoin assets would be valued at 15.2 billion dollars.

MicroStrategy misses the S&P 500 and declares losses

One of the significant impacts of these net losses is that MicroStrategy missed the opportunity for inclusion in the S&P 500, which could have strengthened its credibility and attractiveness to investors.

MicroStrategy’s stock fell by 3.3% after the first quarter 2024 earnings announcement. Indeed, the 65% rise in the price of Bitcoin in the first quarter initially contributed to the stock’s rise. But it has since fallen.

Is this strategy sustainable in the long term? Only time will tell!