MicroStrategy Suffered a $18.9M Loss on Bitcoin Holdings in Q1

MicroStrategy’s earnings report for the first quarter of 2023 published on Monday, May 1st, revealed that the impairment on its Bitcoin holdings amounted to just $18.9 million. This is a notable decrease from the $197.6 million reported for Q4 and is in line with Bitcoin’s 68% YTD rally.

MicroStrategy’s Bitcoin Impairment Down to $18.9 Million in Q1

In its Q1 earnings report published this Monday, Michael Saylor’s MicroStrategy revealed the impairment loss on its Bitcoin amounted to $18.9 million. The result, significantly better than what the company reported for Q4 of 2022, is in line with the cryptocurrency’s significant rally which has been relatively steadily continuing since January.

Together with its Bitcoin-driven performance improvement, the firm also achieved a net income of $461 million—$31.79 per share. Similarly, it also managed to beat its revenue forecast and collected $121 million, instead of the expected $119 million. Despite the results, its stock saw no dramatic movement upon the release of the report and rose about 1.3% in after hours.

On the other hand, MicroStrategy’s shares have been experiencing a very significant rally since the start of the year. While Bitcoin itself rose nearly 68% since the year started, Michael Saylor’s company rallied even more dramatically and is 112% in the green year to date. Posting on Twitter, Saylor also took the opportunity to highlight how his firm’s performance on the market significantly improved since it adopted Bitcoin in 2020.

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MicroStrategy Continues Its Bitcoin Strategy

Considering that Michael Saylor is one of the best-known Bitcoin advocates in the world, it is not surprising that his company has remained committed to the cryptocurrency even during the “crypto winter” of 2022. Just as the company promised after publishing its Q4 report, it acquired nearly 6,500 BTC between mid-February and late March.

The company’s Bitcoin holdings have become so extensive since it began buying in 2020, that by early April it held one of every 150 BTC in existence. The company also used its first-quarter gains to settle some of its long-standing obligations. In late March, it was reported that the firm repaid its $205 million loan to Silvergate two years ahead of maturity.

Unlike many other cryptocurrency-related firms, Silvergate failed to benefit from the digital assets rally that started with the New Year. In early March, the crypto-friendly bank announced it is shutting its doors due to the damage it had sustained in the aftermath of the collapse of FTX. So far, the ongoing bank crisis has claimed 4 lenders with the latest victim—First Republic—falling into receivership earlier today.

Editorial note (May 2nd, 2023, 11:27 AM EST): The headline and the excerpt were edited for clarity.

Do you think MicroStrategy should continue buying more Bitcoin? Let us know in the comments below.