MicroStrategy Inc, the software company that owns the most Bitcoin among corporations, has suffered a huge paper loss of over $600 million due to the recent plunge of the cryptocurrency. The firm, based in Virginia, holds more than 150,000 Bitcoin, which are worth about $3.96 billion at the current market price.
The company started buying Bitcoin in August 2020 as a way to preserve its cash value and hedge against inflation. Since then, it has spent nearly $4 billion to accumulate more Bitcoin, even taking out loans and issuing bonds to finance its purchases. The company’s CEO, Michael Saylor, is a vocal advocate of Bitcoin and has repeatedly expressed his confidence in the long-term potential of the digital asset.
However, Bitcoin’s price has dropped by more than 70% since reaching an all-time high of nearly $69,000 in November 2021. The cryptocurrency market has been hit by various factors, such as regulatory crackdowns, environmental concerns, hacking incidents, and market manipulation. Bitcoin fell below $25,000 on Monday, reaching its lowest level since December 2020.
MicroStrategy’s Bitcoin holdings have also lost more than half of their value since April 2021, when they were worth over $8 billion. The company’s stock price has also plummeted by more than 80% since February 2021, when it reached a record high of over $1,300. The company’s market capitalization is now around $2 billion.
Despite the massive losses, Saylor has not shown any signs of selling or reducing his Bitcoin exposure. He has stated that he plans to hold Bitcoin for decades and that he believes it will eventually reach millions of dollars per coin. He has also updated his Twitter profile picture with laser eyes, a symbol of Bitcoin optimism. He has also encouraged other companies and investors to follow his example and adopt Bitcoin as a store of value.
However, some analysts and critics have questioned Saylor’s strategy and warned of the risks involved in holding such a large amount of Bitcoin. They have pointed out that MicroStrategy may face liquidity issues, margin calls, or regulatory scrutiny if Bitcoin continues to decline or becomes more volatile. They have also argued that Saylor’s personal interest in Bitcoin may conflict with his fiduciary duty to his shareholders and customers.