MicroStrategy's Bitcoin Bet Has Been More Profitable Than Core Business in Last Three Years

Key highlights:

• MicroStrategy is up around $81 million on its Bitcoin investment, assuming they didnt sell any BTC
• Twitter user Kevin Rooke pointed out that the Bitcoin investment has been more profitable for MicroStrategy than the last three and a half years of its business operations
• MicroStrategy execs said the Bitcoin investment has raised the company's profile

MicroStrategy's Bitcoin bet seems to be paying off big time

In August, Business intelligence firm MicroStrategy first announced that it was making a major investment in Bitcoin – at the time, the company spent $250 million to acquire 21,454 BTC. In September, MicroStrategy announced another investment in Bitcoin, spending $175 million to buy 16,796. Assuming they haven’t sold any of their BTC, Microstrategy’s Bitcoin stash is now worth $506 million – the company is up around $81 million on their investment. 

Twitter user Kevin Rooke pointed out that the Bitcoin investment has been more profitable for MicroStrategy than the last three and a half years of its business operations.

Microstrategy has earned $78 million in the last 3.5 years from their business operations.

Microstrategy has earned $100 million in the last 2 months from their Bitcoin purchases.

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— Kevin Rooke (@kerooke) October 27, 2020

Of course, it’s worth keeping in mind that MicroStrategy’s gains are unrealized and Bitcoin is also known for its significant price volatility – a few months from now, the company’s big bet on BTC might not look quite as good. 

MicroStrategy's Bitcoin investment has raised the company's profile, execs say

However, the company’s widely publicized Bitcoin bet could also have a positive impact on MicroStrategy’s core business operations, as it has served as great PR for the company. MicroStrategy’s core business is providing analytics software and services to businesses and individuals. During the company’s latest earnings conference call, MicroStrategy president Phong Li stated:

»We’ve seen a notable and unexpected benefit from our investment in bitcoin in elevating the profile of the company in the broader market. This is benefitting our reputation overall, raising our mindshare among prospective customers.«

In MicroStrategy’s latest quarterly report, CEO Michael Saylor echoed this sentiment:

“The purchase of $425 million of Bitcoin during the quarter offers the possibility of greater return potential for investors than holding such balances in cash and has increased the overall visibility of MicroStrategy in the market.”

Since August 11, when MicroStrategy announced its first Bitcoin purchase, the company’s stock has risen by about 30%. 

The Bitcoin price has taken a pretty sharp dip today after rising to a yearly high of $13,800 yesterday. At the time of writing, BTC is changing hands at $13,200 with a -1.3% 24-hour performance.