Nasdaq-listed software company MicroStrategy has purchased an additional 660 bitcoins for approximately $25 million in cash, at an average price of $37,865 per bitcoin, bringing its total crypto holdings to 125,051 BTC. The company has spent a cumulative total of about $3.78 billion on bitcoin, with an average acquisition price of ~$30,200 per coin. CEO Michael Saylor announced the purchase on Twitter on February 1, 2022, and the transaction was disclosed in a filing with the U.S. Securities and Exchange Commission (SEC) for the period between December 30, 2021, and January 31, 2022.
Latest Purchase Details
MicroStrategy's CEO Michael Saylor tweeted: "MicroStrategy has purchased an additional 660 bitcoins for ~$25.0 million in cash at an average price of ~$37,865 per bitcoin. As of 1/31/22 we hodl ~125,051 bitcoins acquired for ~$3.78 billion at an average price of ~$30,200 per bitcoin." This is the latest in a series of bitcoin purchases by the firm since it began its treasury allocation strategy in 2020.
Market and Regulatory Context
At the time of writing, bitcoin is trading at approximately $39,121, up about 2% in the last 24 hours and 6.4% over the past seven days, but down 18% in the last 30 days. MicroStrategy's purchase came during a price pullback from its November 2021 all-time high near $69,000. CFO Phong Le commented last week: "Our strategy with bitcoin has been to buy and hold, so to the extent we have excess cash flows or we find other ways to raise money, we continue to put it into bitcoin."
Meanwhile, the SEC has raised concerns about MicroStrategy's accounting treatment of bitcoin. In a letter dated December 3, 2021, the regulator stated: "We object to your adjustment for bitcoin impairment charges in your non-GAAP measures." The SEC instructed MicroStrategy to revise its future filings to properly reflect impairment charges, highlighting the growing regulatory scrutiny of how public companies report digital asset holdings.
Impact of Institutional Holdings
Based on current bitcoin prices, MicroStrategy's 125,051 BTC are worth approximately $4.9 billion, exceeding its $3.78 billion total cost by about $1.12 billion (a 30% unrealized gain). However, under U.S. GAAP, intangible assets like cryptocurrencies must be tested for impairment, and any impairment losses cannot be reversed, so the book value may be significantly lower than market value. MicroStrategy's continued buying reinforces the narrative of institutional conviction in bitcoin, while the SEC's intervention adds a layer of accounting risk that other corporate holders will need to monitor.
Overall, MicroStrategy's latest acquisition underscores the appetite among public companies for bitcoin exposure, but the evolving regulatory landscape and price volatility remain key challenges. The outcome of the SEC's disclosure request could set a precedent for how all public companies report their cryptocurrency holdings in the future.