In the second quarter, MicroStrategy also experienced a 13.4% increase in its net income. The CEO of the business intelligence firm, Michael Saylor, confirms that they will continue to bet on Bitcoin.
In the last half year, US business intelligence company MicroStrategy reported a loss of USD 300 million. That was due to the drop in the prices of Bitcoin after Tesla said it would stop accepting payments with the cryptocurrency.
MicroStrategy released a document highlighting that the net loss in the second quarter of 2021 was USD 300 million. That amount is equivalent to USD 30.71 per share.
Meanwhile, the losses due to the impairment of the Bitcoin held by MicroStrategy amounted to USD 424 million.
Although the company lost a lot of money, it also revealed that its net income increased in the second quarter of 2021. They earned a total of USD 125 million, an increase of 13.4% compared to the second quarter of 2020.
The setback that the cryptocurrency market experienced affected the company that Michael Saylor leads. However, they maintain their appetite to keep buying and holding Bitcoin.
It seems that Saylor is implementing the investment strategy known as holding. In this plan of action, the investor assumes that the price of Bitcoin will continue to increase over the years. Furthermore, its scheduled scarcity and usefulness guarantee its increased value.
Leverage in Bitcoin Favors the Shareholders of Companies
Saylor told CNBC television that MicroStrategy benefits its shareholders by leveraging Bitcoin. He has already advised other companies to do the same to increase their store of value.
The executive believes that millions of people will have access to Bitcoin on their cell phones in a matter of time. For that reason, he wants his company to continue seizing the moment.
In June, MicroStrategy acquired about 13,005 BTC, becoming the company with the largest holding of Bitcoin with 105,085 BTC. They purchased that amount in a context where the price of cryptocurrencies was falling.
How MicroStrategy Got Started with Bitcoin
MicroStrategy first bought Bitcoin in August 2020, when they acquired 21,454 BTC. At that time, Bitcoin was trading at USD 11,000 per unit, representing a total cost of USD 250 million.
Currently, MicroStrategy has a total of 105,085 BTC, that is, around USD 4.2 billion invested in the first cryptocurrency.
Some Factors Influencing the Drop in the Price of Bitcoin
The decline in the price of Bitcoin in recent months, which affected MicroStrategy’s investments, could be due to two factors.
Some analysts attribute this to the drop in hash rate after the constant attacks by China on mining activity. So far, the government of the Asian country has banned Bitcoin mining in eight provinces.
Additionally, there has been a crisis of trust that Elon Musk fueled with his comments on the alleged negative environmental impact of Bitcoin. However, a study by CoinShare Research determined that more than 70% of the energy that Bitcoin mining equipment uses is renewable.
By Alexander Salazar