MicroStrategy, a company that provides BI solutions, cloud computing, and software services to a range of clients, has emerged as one of the world’s largest Bitcoin holders with approximately 140k Bitcoins in reserves.
The decision to purchase Bitcoin in bulk was made by former CEO Michael Saylor in 2020, citing concerns over inflation. Saylor believes that the strategy of simply holding Bitcoin has given MicroStrategy an edge over its rivals in the BI industry.
Despite the uncertainty regarding the regulation of cryptocurrencies in the US and other countries, Bitcoin has made a comeback recently, spiking by over 70% over the past quarter. This has allowed MicroStrategy to turn a profit this quarter, according to Bloomberg.
The company’s quarterly report indicated a net income of $461 million in Q1, with firm shares trading at $31.79. The company also took advantage of tax benefits resulting from its Bitcoin stash.
Bitcoin’s price appreciation allowed MicroStrategy to repay a loan from Silvergate at a 22% discount and strategically manage its balance sheet by adding 7,500 bitcoins in the quarter.
Thanks to Saylor’s confidence in Bitcoin, the company is now reporting profits while most of its peers are faltering amid inflation and a looming recession.
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