MicroStrategy’s ($MSTR) $4 Billion Bitcoin Stake on Path to Profitability

• Bitcoin’s recent surge has pushed MicroStrategy’s Bitcoin betting closer to profitability again.
• Under Michael Saylor, the IT company has spent more than $4 billion to acquire more than 138,900 BTC in three years.
• The Bitcoins were bought at an average price of $29,817, just $1500 more than the current price.
• The company’s share price is up more than 146% during BTC’s rally.

MicroStrategy’s popular Bitcoin bet appears to be returning to profitability after being in the red for the past three quarters. With Bitcoin maximalist Michael Saylor at the helm, the IT company has accumulated 138,955 BTC over the past three years and spent a whopping $4.14 billion on the flagship cryptocurrency.

MicroStrategy stock rises during BTC rally

Since the start of 2023, Bitcoin has gained more than 71%, going from $16,547 to $28,336 at the time of writing. This rally marked BTC’s biggest quarterly gain in two years. The current price is about $1,500 below MicroStrategy’s average purchase price of $29,817. Earlier this week, the price of BTC managed to hit $29,142 for a brief period, bringing Michael Saylor’s Bitcoin bet closer to breakeven and even profitability.

Saylor’s first BTC purchase came back in August 2020, when he chose Bitcoin over traditional investment vehicles such as short-term US government securities, to invest MicroStrategy’s money as a hedge against inflation. By comparison, short-dated US Treasury bonds have returned about 2.5% since Saylor’s first BTC investment. Bitcoin’s massive rally in 2021 led to quarterly paper profits of as much as $3.1 billion for Saylor’s company.

While BTC’s fluctuation has led to impairments of over $2.1 billion for MicroStrategy. For the first time in ten quarters, the company may be able to avoid having to write down the value of its BTC holdings, thanks to the rise in the price of BTC. The 2023 Bitcoin rally has had a significant impact on MicroStrategy’s ($MSTRshare price. The stock is up more than 146% since the start of the year and is currently trading at $292. Bitcoin has returned 71% in the same period.