.MicroStrategy reported a $918 million impairment charge on its bitcoin holdings in Q2, reflecting the crypto’s sharp drop in the quarter. But founder and chairman saylor continues to HODL. By NelWang
secured a $205 million term loan in March
to potentially purchase additional bitcoin, but Saylor, a bitcoin maximalist, has noted that the company has thousands of bitcoin it can pledge as additional collateral if needed. MicroStrategy's digital asset impairment reflects the decline in the price of bitcoin versus the price at which the bitcoin was acquired. Under standard accounting rules, the value of digital assets such as cryptocurrencies must be recorded at their cost and then only adjusted if their value is impaired, or goes down. But if the price rises, that does not get reported unless an asset is sold.
The company's 129,699 bitcoins held at the end of June 30, 2022, were acquired for approximately $4 billion, reflecting an average cost per bitcoin of approximately $30,664, the company reported. At bitcoin’s current price of about $23,000, the value of those holdings is approximately $3 billion. MicroStrategy's entire market capitalization is roughly $3.2 billion.
MicroStrategy shares were flat at $278.01 in after-hours trading Tuesday, after initially falling 2% to 3%. Shares have tumbled around 46% year to date, just shy of bitcoin’s roughly 50% drop over the same time period.Read more:
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