By George Ward
MicroStrategy Inc, the largest Bitcoin holder with over 130,000 BTC as of September 20th, has recently lost over $1.8 billion. This is due to the recent price drops in the crypto market. Bitcoin has fallen below $18K.
The Virginia-based software firm and its subsidiaries hold over 130,000 BTC in their crypto vault. 130,000 BTC is worth about $2.2 billion, calculated with Bitcoin’s current price.
MicroStrategy bought its Bitcoins at an aggregate price of about $4 billion. As a result, each Bitcoin costs about $30,369. Thus, the value of the firm’s crypto holdings is at a $1.8 billion loss.
Meanwhile, Michael Saylor, the company’s Executive Chairman, repeatedly reiterated that it would not sell its Bitcoin. Saylor is well known for his unwavering support for the flagship currency.
Earlier this year, the software firm recorded an impairment charge of $917.8 million. This was after the firm reported losses due to the fall in Bitcoin’s price.
According to MicroStrategy, BTC is an intangible asset. This means the firm must mark down any fall in Bitcoin’s value.
Also, if MicroStrategy later decides to sell its BTC, it must report capital gains tax to the IRS (Internal Revenue Service). In August, Saylor resigned as the company’s CEO to handle other matters.
He needed time to work on the firm’s BTC strategy after its $1 billion loss. Following his resignation, MicroStrategy bought 301 BTC for $6 million the next month. Unfortunately, these purchases have become paper losses as BTC’s price has dropped by 15%.
Saylor Calls For Crypto Regulation Amid FTX Crisis
Nevertheless, Saylor believes Bitcoin has a lower risk than gold or cash. In February 2021, he told Bloomberg that BTC is the rarest global asset.
On Friday, the MicroStrategy chairman commented on the recent fall of the FTX crypto exchange. Saylor noted that the incident would have a devastating effect on the crypto market.
However, he argued that it would be a blessing for Bitcoin. According to him, BTC is a commodity that can be self-custodied, unlike other tokens.
Further, Saylor said the ongoing FTX crisis would cause regulators to speed up crypto regulation. He urged regulators to offer clear guidelines for registering digital assets, registering digital tokens, and digital exchanges.
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