Bitcoin Rally Puts MicroStrategy in the Green for First Time in 9 Quarters
MicroStrategy, the largest public holder of Bitcoin, posted a profit for the first time in nine quarters thanks to a hefty rise in the price of BTC let the firm turn to a tax benefit.
The business enterprise company has been accumulating Bitcoin since August 2020 and it contributed significantly to the company’s negative balance sheet.
The company has had to realize an impairment charge on its taxes due to losses on its Bitcoin holdings.
These losses are recorded as an expense on the company’s income statement, which reduces its reported profits.
However, things changed as Bitcoin ended Q1 2023 with an impressive 70% rally.
The company reported an impairment loss of $18.9 million for the quarter, down from the last quarter’s $197.6 million in reported losses.
The gains also allowed MicroStrategy to repay its $205 million Bitcoin-backed loan with Silvergate Bank.
The firm added 7,500 BTC in the first quarter of 2023, bringing its total holdings to 140,000 BTC.
The average purchase price of its Bitcoin stash is $29,803.
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This allowed the company to tap a one-time tax benefit of $453.4 million.
The company posted a net income of $461 million in the first quarter of 2023 compared to a net loss of $249.7 million in Q4 2022.
Michael Saylor, a Bitcoin advocate and co-founder of MicroStrategy, noted yesterday that the company had outperformed its peers and big tech companies since adopting its Bitcoin strategy by a huge margin.
ByFinance.yahoo
