MicroStrategy Incurs Net Loss of $53.1 Million, But Bitcoin Buying Spree Continues

The biggest corporate holder of Bitcoin, MicroStrategy, shared information about its total loss of $53.1 million in Q1 2024. But amid this negative development, the company maintained its usual purchase of Bitcoin, stacking even more in April.

Notably, the recent loss incurred is lower than the previous value in the same period last year. At the time, the company reported losing a total of $191.6 million.

Also, according to the company’s Q1 results filing, revenue tanked in the same period, falling 5.5% compared to Q1 2023. This decline brings its total revenue to $115.2 million.

MicroStrategy’s Dealings in Q1 2024

MicroStrategy has yet to implement the new accounting standard for digital assets. This means they are yet to take advantage of Bitcoin’s 65% price increase using this new method.

So, according to traditional accounting, their Bitcoin holdings are valued at $5.07 billion, based on $23,680 per Bitcoin. This figure would have amounted to $15.2 billion if they had used the fair value approach.

Notwithstanding, MicroStrategy is going strong with its Bitcoin investments. In April alone, they bought an extra 122 Bitcoin for $7.8 million. This purchase raised their total holdings to 214,400 Bitcoin, valued at $13.5 billion.

MicroStrategy also raised $1.5 billion from two convertible note debt offerings in the first quarter, enabling it to buy another 25,250 Bitcoins.

According to the CEO, Phong Le, Q1 marked the company’s 14th consecutive quarter of increasing its Bitcoin holdings.

However, despite the firm’s active involvement in Bitcoin, MicroStrategy’s stock took a hit, dropping 3.3% in after-hours trading following the announcement of its Q1 financial results. This drop is likely tied to Bitcoin’s price falling after its initial surge.

The stock reached a high of $1,704 by the end of March, resulting from Bitcoin’s rally at the time. However, according to Google Finance, it appears to be dropping and currently trades at $1,292.

Bitcoin (BTC) Market Condition

While Bitcoin’s recent dip of 5.6% over the weekend grabbed headlines, there’s more to the story than meets the eye. Besides Bitcoin, other major digital assets like Ethereum, Solana, and XRP also recorded losses, contributing to a 3% drop in the overall market cap to $2.42 trillion.

Insights from Crypto Banter, a respected voice in the crypto community, shed light on the underlying causes behind this decline. Rather than attributing it solely to crypto market dynamics, he pointed to external factors, particularly the devaluation of the Japanese Yen against the US dollar.

Additionally, the anticipation surrounding the upcoming Federal Reserve meeting has fueled the fire. 

Market analysts closely monitor the Fed’s stance on interest rates and monetary policy adjustments, as any decisions they make could reverberate across financial markets worldwide.