Microstrategy Expands Bitcoin Holdings Despite Price Volatility
Microstrategy completed another Bitcoin purchase over the previous quarter, bringing its total holdings to 140,000 BTC. The company’s financial results, announced on May 1st, revealed that it bought 7,500 BTC, worth $209 million at current rates. Phong Le, President, and CEO of Microstrategy underscored the company’s ongoing “conviction in our bitcoin strategy,” while an executive noted that its investment had outperformed major benchmarks during 2021.
Pay Down Bitcoin Debt, Not Electric Bills
Microstrategy also reported that it used some of its investment gains to pay down a Bitcoin-backed loan that was due to expire this year. In total, Microstrategy spent $161 million repaying the loan to Silvergate Bank, leaving the company with no existing exposure to the failed institution. Silvergate, which had specialized in crypto clients, collapsed in March.
Other Business Wasn’t Too Shabby
Net income was $461.2 million for the quarter, or $31.79 per share, up significantly from losses of $130.8 million in comparison to Q1 2022. Total revenue grew 2.2%, to $12.19 million, for this year’s initial business quarter. However, the firm showed its vulnerability when its stock fell 6.37% during the day’s trading. Nonetheless, it picked up a reassuring 1.80% during the back after hours.
Investors Heavy in Ethereum
Serious players have boldly surged forward this year, strongly voicing their ongoing support for cryptocurrency. The appeal of Ethereum has grown, attracting high net worth portfolio managers to well-known brands such as JP Morgan, Goldman Sachs, and Galaxy Digital, which even encouraged clients to back higher-yield Ethereum assets. Meanwhile, Warren Buffet dismisses crypto as operating purely on speculation and ignores any buying opportunities.
Journalist Mark Rizzn Hopkins summarizes succinctly: Microstrategy is bullish on bitcoin and continues to pour in despite downside risks. It has so far effectively managed to evade concerns, but risks will begin to mount as price volatility persists.
[h/t Mike Dalton]