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MicroStrategy, a leading U.S. business intelligence firm and one of the country's top corporate Bitcoin holders, has marked a triumphant turnaround in Q2 2023. After previously reporting a $1.1 billion net loss in the same period last year, the company disclosed $22.2 million in net income in its recent Q2 earnings report.
The firm's fortunes have taken an upbeat trajectory, mainly thanks to a substantial reduction in digital asset impairment losses. Last year, the Q2 impairment loss was a staggering $918 million; this year, it's down to $24.1 million. Such impairment occurs when Bitcoin's market price falls beneath the acquisition price.
The Q2 results were largely influenced by the price of Bitcoin, which ranged between $24,000 and $30,750 during the quarter. A mid-June rally following new Bitcoin exchange-traded funds filings to the Securities and Exchange Commission also played a role. By July 31, MicroStrategy's Bitcoin holdings had swelled to 152,800 bitcoins, with a significant addition of 12,333 bitcoins in the quarter.
Andrew Kang, MicroStrategy's CFO, revealed that the funds used to expand Bitcoin holdings were sourced from the company's cash from operations. He cited institutional interest, accounting transparency, and regulatory clarity for Bitcoin as motivating factors.
Moreover, Michael Saylor, MicroStrategy chairman, expressed confidence in Bitcoin’s future, highlighting that SEC enforcement actions would likely favor Bitcoin. During Q2, the company spent $347 million to purchase 12,333 Bitcoin, and by July 30, acquired an additional 467 BTC, bringing the total balance to a worth of $4.5 billion at present rates.
The future for MicroStrategy seems even brighter, with plans to sell up to $750 million in stocks for further Bitcoin acquisitions and other corporate initiatives. The price of Bitcoin has experienced an 80% surge since 2023 began, currently trading at $29,206.80. New York-based investment firm Berenberg Capital further bolstered the positive outlook by predicting a significant increase in MicroStrategy's share price due to the upcoming Bitcoin halving rally.
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