The Bitcoin investment of MicroStrategy has come under scrutiny due to its Dollar Cost Average (DCA) for the entire investment currently standing at approximately $29,000. However, considering that the current value of Bitcoin is around $26,265, it appears that the company is holding its Bitcoin assets at a loss.
MicroStrategy’s Bitcoin Treasure Grows with $147M Investment
On September 25th, Michael Saylor, the co-founder and executive chairman of MicroStrategy, made a significant announcement on X (formerly Twitter). MicroStrategy has recently invested $147.3 million in cash to purchase 5,445 BTC, with each Bitcoin costing an average price of $27,053.
Currently, MicroStrategy possesses Bitcoin holdings valued at approximately $4.68 billion and holds a total of 158,245 BTC. It’s worth mentioning that on December 22, 2022, MicroStrategy sold 704 BTC.
MicroStrategy’s Bitcoin Investment Isn’t Profitable?
However, it is crucial to acknowledge that MicroStrategy’s financial stability has witnessed turmoil due to a persistent decline in the value of bitcoin. Notably, bitcoin recently experienced a phenomenon known as a “death cross,” resulting in a 3.6% drop since reaching its monthly high of $27,700.
The company can utilize a strategy known as Dollar Cost Averaging (DCA). This approach involves purchasing more Bitcoin when prices are low, ultimately reducing the average cost of their investment over time. By consistently employing this method, they may eventually reach a point where financial losses are minimized.
Even though it might look like MicroStrategy’s Bitcoin investment isn’t making money right now, it’s important to remember that this is just a snapshot of time.
Their strong financial position gives them the freedom to plan for the long term, which is not always easy in the fast-moving world of cryptocurrencies.