MicroStrategy Invests $414.4 Million In Bitcoin - Market Analysis.

MicroStrategy Invests $414.4 Million In Bitcoin - Market Analysis.

2021-12-02 | Big Bob

MicroStrategy Invests $414.4 Million In Bitcoin - Market Analysis.

Business data analytics firm has been funding in BTC since August 2020 as MicroStrategy's CEO, Michael Saylor, stated on recently via a Twitter post and a business filing that the company has purchased an additional 7,002 Bitcoin (BTC) for $414.4 million at an average price of $59,187 per coin. MicroStrategy raised $414.4 million in cash by selling 571,001 shares of company stock for $732.16 each between Oct. 1 and Nov. 29. The corporation now holds 121,044 BTC, worth up to $3.57 billion, as of Monday. It was purchased for an average of $29,534 per coin, with capital appreciation from prior coins included. MicroStrategy announced in August 2020 that Bitcoin will be its treasury reserve asset, claiming the digital currency as a "reliable store of value" and an appealing investment with higher long-term return potentials than cash. Furthermore, the firm drew attention to governments' exceptional support to battle COVID-19 as a catalyst for probable inflation and consequent devaluation of fiat currencies. MicroStrategy has almost always purchased Bitcoin every quarter since that time. Ordinarily, common investors lose money when the price of Bitcoin falls and make money when the price rises. However, this isn't always the case with MicroStrategy. According to MicroStrategy's earnings conference transcript from last month, the company's Bitcoin holdings are classed as "indefinite-lived intangible assets under applicable accounting rules," according to Phong Le, president, and chief financial officer. This means that if the fair value, or market value, of Bitcoin, falls below its book value at any point after its acquisition, the corporation will have to record impairment costs. These impairment costs can subsequently be used to offset the company's corporate income tax bill.

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