MicroStrategy’s Bitcoin Holdings: Facing $600M Unrealized Losses

MicroStrategy Inc, the largest corporate holder of Bitcoin, has seen its holdings suffer over $600 million in unrealized losses as a result of the recent price crash.

The software firm currently owns more than 150,000 Bitcoin, valued at approximately $3.96 billion. However, these holdings were acquired at a combined cost of $4.5 billion, resulting in an average purchase price of around $29,970 per Bitcoin. This has led to a deficit of $613 million.

MicroStrategy Back to Holding Bitcoin At Loss

In the past few days, the price of Bitcoin has dropped by 11% to around $25,000, down from over $29,000 on August 16. As a result, MicroStrategy’s Bitcoin holdings have turned red for the first time since June, causing unrealized losses for the company.

The firm’s bet on Bitcoin became profitable earlier when the digital asset surged above $30,000, thanks to institutional interest in the market.

Despite these losses, MicroStrategy remains steadfast in its conviction about Bitcoin. Michael Saylor, the chairman of MicroStrategy, is a vocal Bitcoin enthusiast who has often referred to the cryptocurrency as “digital gold.” Saylor leads the company’s Bitcoin acquisition strategy and has repeatedly stated that they have no plans to sell their holdings.

Despite the unrealized losses, MicroStrategy’s MSTR has seen a 132% increase in the year-to-date metrics. However, it has experienced a 14.49% decline in the last five days, according to Tradingview data.

Bitcoin Percentage in Profit Drops

MicroStrategy’s situation is not unique, as the percentage of Bitcoin in profit has fallen by more than 10% in recent days.

According to Glassnode’s data, the percentage of Bitcoin supply in profits dropped from 73% to 60% in the past week, coinciding with the significant decrease in its value.

Earlier in the week, the on-chain analytics firm reported that the market was slightly “top-heavy,” with many price-sensitive investors at risk of suffering unrealized losses.

It is important to note that the current market conditions have not shaken the conviction of long-term holders (LTH) of Bitcoin. This group represents 75% of the cryptocurrency’s circulating supply and consists of BTC holders who have held their assets for at least 155 days.