MicroStrategy continues stacking Bitcoin with $1.65 billion purchase during Q1

MicroStrategy’s first quarter earnings report showed the firm bought roughly 25,250 BTC for $1.65 billion at an average price of $65,232 per BTC during the first three months of the year.

With its latest purchases, MicroStrategy now holds 214,400 BTC in total — equating to roughly 1% of the total Bitcoin supply. The company reported its total holdings at a cost of $7.54 billion, or $35,180 per bitcoin, as of April 26.

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The firm reported a downturn in revenue but continued to bolster its Bitcoin holdings, highlighting a steadfast commitment to its strategic investment in the flagship crypto.

The company’s total revenue for the first quarter stood at $115.2 million, representing a 5.5% decrease from the previous year. The decline was slightly steeper when adjusted for constant currency, with a 5.7% decrease.

Despite the overall downturn, subscription services revenue saw a rise, climbing 22% year-over-year to $23.0 million, which indicates a growing adoption of MicroStrategy’s cloud-native software solutions.

The company posted a net loss of $53.1 million for the quarter, a stark contrast to the net income of $461.2 million reported in the same quarter last year. The loss was largely due to a $191.6 million impairment loss on its Bitcoin holdings.

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MicroStrategy’s operating expenses also ballooned, up 152.8% to $288.9 million, further weighed down by these digital asset impairments. Gross profit for the quarter stood at $85.2 million, with a gross margin of 74.0%, down from 77.1% a year ago.

Despite these financial pressures, the company remains optimistic about its operational strategy and the integration of its software platforms into cloud services. The recent approval of spot bitcoin exchange-traded products has also bolstered this outlook, suggesting a potential increase in institutional demand for cryptocurrencies.

14th consecutive quarter

Andrew Kang, MicroStrategy CFO, noted that the company added Bitcoin to its balance sheet for the 14th consecutive quarter with its latest purchases.

Kang added that Bitcoin’s price “appreciated significantly” in the first quarter of 2024 and attributed the trend to the approval of spot Bitcoin ETFs, greater institutional interest, and improved regulatory clarity.

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Bitcoin hit all-time highs at several points this year, most recently touching $73,686.93 on March 14, according to CryptoSlate data.

Kang added that MicroStrategy raised $1.5 billion through two convertible debt offerings in the first quarter. Earlier announcements indicated that the firm spent a portion of raised funds on Bitcoin.

MSTR stock performance

MicroStrategy executive chairman and co-founder Michael Saylor promoted the company’s Bitcoin acquisition initiative as an investment opportunity.

Saylor often touts MSTR stock as an alternative to spot Bitcoin ETFs and direct Bitcoin investment. He once again backed his statements with long-term data — reporting that MSTR has seen 937% price growth since adopting its Bitcoin strategy on August 10, 2020.

By comparison, Bitcoin has grown 435% in value over the same period, while the S&P 500 has only appreciated 52%.

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Author: Mike Dalton

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