Michael Saylor's Strategy Has Spent $64 Billion Buying Bitcoin at an Average Price of $75,482 a Coin. Here's Why That Position Is Sitting on a $10 Billion Paper Loss Today.
Until the price of Bitcoin recovers, Strategy is going to have a hard time attracting new investors.
Overview
Since August 2020, when it first launched its bold Bitcoin (CRYPTO: BTC) treasury company model, Michael Saylor's Strategy (NASDAQ: MSTR) has acquired a remarkable amount of Bitcoin. All told, the company now owns 840,447 BTC. To put that number into perspective, that's roughly 4% of all Bitcoin in circulation.
That's the good news. The bad news is that Strategy's Bitcoin position is now deep under water. The current price of Bitcoin is just $65,000, but Strategy's average price to acquire Bitcoin is $75,482. Thus, a position that took nearly $64 billion to acquire is now worth just $54 billion. That's why the company is sitting on a $10 billion paper loss.
Details
This might sound obvious, but when the price of Bitcoin is zooming higher, Strategy is able to report massive paper gains. When the price of Bitcoin is falling (as it is now), the company is forced to report massive paper losses. Until the price of Bitcoin moves higher, then, Strategy is going to be reporting bad news to investors for the foreseeable future.
Source
Originally published at www.fool.com.