One of the biggest corporate Bitcoin holders in the United States, business intelligence company MicroStrategy, was able to earn a profit in the second quarter amid a sharp rise in Bitcoin price.
MicroStrategy recorded a net income of $22.2 million for the second quarter of 2023, which is a significant improvement from the $1.1 billion net loss it experienced in the same previous quarter. At $120.4 million, total revenues remained essentially unchanged.
An important factor in the swing was a digital asset impairment loss that was $24.1 million in the quarter against a massive $917.8 million in Q2 2022.
In the case of MicroStrategy, crypto asset impairment happens when the market price of Bitcoin declines beneath the purchasing price of Bitcoin.
In the second quarter, the price of Bitcoin fluctuated between $25,000 and $30,700, with a substantial increase in mid-June following the submission of multiple new spot Bitcoin exchange-traded funds to the US SEC.
According to MicroStrategy CFO Andrew Kang, “as of July 31, 2023, our bitcoin holdings jumped to 152,800 bitcoins, with the purchase in the second quarter of 12,333 bitcoins being the biggest rise in a single quarter since Q2 2021.”
In order to increase the amount of Bitcoin on its balance sheet, Kang said that it used cash from operations. This was done against a “promising backdrop” of accounting transparency, institutional interest and growing regulatory clarity for Bitcoin.
Michael Saylor, the chairman of MicroStrategy, stated in an interview on June 13 that he thinks recent enforcement actions by the SEC will ultimately work in favour of Bitcoin, the only cryptocurrency Gary Gensler has excluded from the definition of a security.
For $347 million, the business purchased 12,333 Bitcoins throughout the quarter. As of July 30, the company purchased an additional 467 BTC, bringing its overall Bitcoin balance to $4.5 billion at the time of writing.
The company disclosed in a separate SEC filing on August 1, that it also intends to sell up to 750 million dollars’ worth of stock to fund the purchase of Bitcoin and other general business needs.
Since the beginning of the year, the price of Bitcoin has risen 79% and it is expected to keep rising over 2023. On Google Finance, it is presently selling for $29,206.80.
According to Google Finance, the share price of MicroStrategy has likewise experienced a rebound, starting at $145.02 a share on January 3 and jumping by nearly 200% to $434.98.
In July, Berenberg Capital analysts at the New York-based investment firm provided an optimistic future for MicroStrategy, stating that the forthcoming Bitcoin halving rally might see a significant rise in its shares price.
