In the first quarter of 2024, MicroStrategy, the largest corporate holder of Bitcoin, experienced a financial loss of $53.1 million. However, this did not deter the company from acquiring more Bitcoin. In April alone, MicroStrategy spent $7.8 million to purchase an additional 122 Bitcoin.
The company’s net loss was primarily due to a significant increase in digital asset impairment loss. Compared to the first quarter of 2023, the impairment loss surged tenfold to $191.6 million. This loss, along with a 5.5% decline in revenue, led to a challenging financial quarter for MicroStrategy. The company’s revenue for Q1 2024 was $115.2 million.
Despite Bitcoin’s impressive 65% gain in fair value during the quarter, MicroStrategy has not yet implemented the new fair value accounting standard for digital assets. As a result, the company did not report $15.2 billion for its Bitcoin holdings, but rather recorded $5.07 billion using the conventional accounting method, valuing each Bitcoin at $23,680.
Interestingly, MicroStrategy had previously expressed its support for the new fair value accounting standard in a letter to the Financial Accounting Standards Board (FASB) in May 2023. However, the implementation of this standard was delayed, and it will only be mandatory for fiscal years ending after December 15, 2024.
MicroStrategy, which was originally a software business, has now rebranded itself as a “Bitcoin development company.” The company’s dedication to Bitcoin is evident as it continues to add more of the digital asset to its reserves. In the first quarter, MicroStrategy raised $1.5 billion through convertible note debt offerings, which allowed them to acquire an additional 25,250 Bitcoin. This marks the fourteenth consecutive quarter that the company has increased its Bitcoin holdings.
In the crypto news world, it has been observed that Bitcoin miners are liquidating their assets at a higher rate after the halving event. This is mainly to cover operational costs and ensure the sustainability of their mining operations.