MicroStrategy, the data analytics company run by billionaire cryptocurrency fanatic Michael Saylor, announced its latest big investment in bitcoin on Tuesday morning. This is the fourth time the company has made a huge bet on bitcoin, even as the SEC is cracking down on how the company has reported operating profits in the wake of bitcoin’s recent price crash.
- Between December 30 and January 31, MicroStrategy, a company based in Virginia, bought 660 bitcoins for about $25 million in cash, or $37,865 per coin. This is more than any other company in the world owns.
- The company, which began buying cryptocurrency for its balance sheet in August 2020, says it now owns about 125,051 bitcoins, which it bought for about $3.8 billion, or about $30,200 per coin, at the time.
- Using debt and money from a $1 billion stock offering MicroStrategy announced in June, the company has been able to buy bitcoins.
- When MicroStrategy made the announcement, shares of the company rose about 4% on Tuesday morning. This year, they’ve lost more than 30% because of a broad market slump that has sent prices for bitcoin down about 20%. This is why:
- New investment: MicroStrategy made a new investment in bitcoin this week, which comes at a time when the price of the digital currency is near a six-month low. The drop in prices was largely caused by the Federal Reserve’s decision to stop using pandemic-era stimulus measures, which pushed prices down about 50%.
- There has also been a lot of attention from regulators about how MicroStrategy has reported how much money it has in bitcoins and how much money it has lost on its financial reports. In December, the SEC asked MicroStrategy to stop adjusting its profits to exclude accounting losses from bitcoin’s fall.
$4.9 billion. That’s the value of MicroStrategy’s bitcoin holdings on Tuesday given prices of about $38,930 per coin. Tesla and Square, which is run by billionaire Jack Dorsey, have also reported accounting losses because of their bitcoin holdings. According to the crypto data website CoinGecko, the crypto market is now worth about $1.9 trillion. It hit a high point on November 10, when it was worth almost $3 trillion.