At the time of Bitcoin's collapse, MicroStrategy (NASDAQ: MSTR), the world's largest listed company holding Bitcoin, may report an impairment loss of $3.4 billion in the second quarter. The data shows that as of the end of the first quarter,
MicroStrategy's bitcoin holdings were worth about $5.9 billion, which means that if Bitcoin's closing price on the last day of the second quarter is planned at $18,900, MicroStrategy's bitcoin holdings are worth about $5.9 billion. To shrink by 58% to $2.45 billion, that is, an impairment loss of $3.4 billion. The drop in bitcoin’s price is a paper loss for the company under U.S. accounting standards, and MicroStrategy won’t register investment gains until it finally sells.
On Wednesday, MicroStrategy CEO Michael Saylor said the firm spent another $10 million on 480 bitcoins at the height of the cryptocurrency market crash. According to MicroStrategy's SEC filing, between May 3 and June 28, the firm bought the bitcoins at an average price of $20,817. Michael Saylor remains adamant that he will not seek to sell his bitcoin holdings. Mark Palmer, head of digital asset research at BTIG, gave MicroStrategy a “buy” rating in a recent report with a price target of $950. He said his price target is based on bitcoin reaching $95,000 in 2024.
There are only 21 million bitcoins, so the supply of bitcoins is certain, according to Mark Palmer. “This means that the bitcoin price will be driven by demand rather than a balance of supply and demand.”
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