MicroStrategy Will Proceed To Purchase BTC Despite $146.6 Million In Q4 Impairment Charges

• MicroStrategy purchased 53,922 BTC for an average buying price of $48,710. This takes the total BTC held by the company to 124,391

• The company incurred $146.6 million of bitcoin impairment costs. Impairment charges totaled $830.6 million in 2021, compared to $70.7 million in 2020. The total worth of its holdings is $2.9 billion, compared to a total cost of $3.8 billion, resulting in a $901 million cumulative impairment charge.

• An extra 660 BTC was purchased by MicroStrategy for nearly $25 million in money. It now has a total of 125,051 BTC.

MicroStrategy intends to continue investing its free cash flow in bitcoin and wants its investors to view it as a way to gain exposure to the cryptocurrency. Today, the company released its Q4 earnings report, indicating that in 2021, it purchased 53,922BTC for an average buying price of $48,710. This takes the total BTC held by the company to 124,391.

The SEC stated that it expects the company to stop adjusting the impairment losses

However, those holdings come with impairment costs, which the Securities and Exchange Commission has recently expressed worry about (SEC). Impairment is a term used in accounting to describe how much money was lost when the value of an asset in a balance sheet dropped from when it was initially purchased. MicroStrategy has lobbied for changes in accounting practices in the United States to account for the volatility of crypto assets. The Securities and Exchange Commission, on the other hand, stated that it expects the company to stop adjusting the impairment loss in its accounting processes and instead employ standard methods.

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In the fourth quarter, the company incurred $146.6 million of bitcoin impairment costs. Impairment charges totaled $830.6 million in 2021, compared to $70.7 million in 2020. The total worth of its holdings is $2.9 billion, compared to a total cost of $3.8 billion, resulting in a $901 million cumulative impairment charge. Keeping bitcoin onto the balance sheet would remain a priority for the company. It continued its buying frenzy this morning,An extra 660 BTC was purchased by MicroStrategy for nearly $25 million in money. It now has a total of 125,051 BTC.

MicroStrategy as an alternative to bitcoin futures-based exchange-traded funds

Investors should consider MicroStrategy as an alternative to bitcoin futures-based exchange-traded funds, according to CEO Michael Saylor, because the firm offers indirect exposure into cryptocurrency without any costs involved with rolling over contracts.

According to Saylor, the company is also exploring ways to make use of its bitcoin holdings. Saylor mentioned that certain of the funds not designated as collateral could be used to create income, but he didn’t promise any plans.