On Dec. 22, MicroStrategy sold just over 700 BTC, soon after acquiring more than 2,300 coins. Why?
MicroStrategy recently sold some of its bitcoins! What is this for?
A few days ago, MicroStrategy sold nearly $12 million worth of bitcoin. This happened in the middle of a transaction process where the company allegedly added more coins to its portfolio despite total market losses. Check out the details below.
A few days ago, MicroStrategy sold nearly $12 million worth of bitcoin. This happened in the middle of a transaction process where the company allegedly added more coins to its portfolio despite total market losses. Check out the details below.
Exchange of capital
After large BTC purchases were made, the cryptocurrency aficionado reportedly took a step back. After the company bought about 2,395 bitcoins between Nov. 1 and Dec. 21, it liquidated some of the assets.
On the 22nd, MicroStrategy sold around 704 BTC worth between $11.80 million, with each coin trading at around $16,776. The aforementioned transaction resulted in a loss for the company, provided the previous purchase amount was approximately $17,871.
The current market environment has not been favorable to MicroStrategy’s positioning, as the decline in cryptocurrencies affects the price of its own shares. The company’s shares have lost about 75% of their value by 2022.
As reported by the analysis in Key Alerts, Bitcoin could consolidate a downtrend despite its apparent laterality, at least in the short term. However, this scenario didn’t affect MicroStrategy’s BTC equity breakup, which still holds a large portion of the stake.
In return, another purchase of more bitcoins (810 BTC) was completed on December 27th. This means that the general decline of the cryptocurrency market would not be “warning”.
A “tax base”
Contrary to what some may believe, the recent cryptocurrency sell-off is not caused by a “drop in confidence”. The company intends to “carry forward the capital losses resulting from this transaction against previous capital gains”. This is in consideration of the presence of federal income tax laws.
In short, MicroStrategy has sold part of its bitcoins for tax purposes and not so much for a hypothetical loss of trust. Michael Saylor, for his part, spoke about the conservation of the company’s coins.
The former CEO clarified that Bitcoin-related assets increased by the end of 2022. In this way, he said that approximately 132,500 BTC are held, approximately 2,500 coins more than the balance before November.
Its Bitcoin shares are currently trading at around $2.2 million, while costing the company just over $4 million, including losses. Based on this, it is expected to announce writedowns for BTC-related asset writedowns in its fourth-quarter earnings announcement.
